Fiscal trouble ahead for most future retirees

From the Washington Post:

For the first time since the New Deal, a majority of Americans are headed toward a retirement in which they will be financially worse off than their parents, jeopardizing a long era of improved living standards for the nation’s elderly, according to a growing consensus of new research.

The Great Recession and the weak recovery darkened the retirement picture for significant numbers of Americans. And the full extent of the damage is only now being grasped by experts and policymakers.

There was already mounting concern for the long-term security of the country’s rapidly graying population. Then the downturn destroyed 40 percent of Americans’ personal wealth, while creating a long period of high unemployment and an environment in which savings accounts pay almost no interest. Although the surging stock market is approaching record highs, most of these gains are flowing to well-off Americans who already are in relatively good shape for retirement.

Liberal and conservative economists worry that the decline in retirement prospects marks a historic shift in a country that previously has fostered generations of improvement in the lives of the elderly. It is likely to have far-reaching implications, as an increasing number of retirees may be forced to double up with younger relatives or turn to social-service programs for support.

More here.

As economist Duncan Black, who, under the nom de plume "Atrios," writes my favorite blog Eschaton, has been observing a lot lately, the 401K experiment is now obviously a complete and total failure.  And, in retrospect, that's absolutely no surprise: moving from guaranteed benefits to a market model requires a population of savvy investors, and obviously most people are not savvy investors.  Indeed, we, as a society, don't even try to educate people about the boring and tedious information required to play the market successfully, nor do we portion out the wherewithal for individuals to undertake the second job that retirement planning essentially is.  No, 401Ks, as an approach to retirement, was always a big scam, a way to get people to hand their money over to Wall Street.  And, by that measure, it's been pretty successful.  But as a way to provide for the elderly when they have reached retirement age, it's a disaster.

This will affect me, to be sure.  I've got some money in an IRA at the moment, and, thank god, I haven't had to break into it to make ends meet.  Yet.  But it's not nearly enough.  And my wages as a waiter aren't enough to really justify putting any more money into that account.  I'll move onto a better work situation eventually, and will save like crazy, but it still won't be enough.  And I'm better off than a lot of Americans.

There will be social unrest because of this.  It's an issue that affects everyone, not just the elderly.  And here the establishment sits contemplating cutting Social Security benefits.  Wrong direction.  What's totally fucked up is that a nation as wealthy as ours, with as many resources as we have, and with huge labor reserves, definitely has the ability to give everybody a comfortable retirement.  But we don't.  We let the rich get richer.  We allow massive corporations to go without paying any income tax at all.  We have an empire sized military, which benefits, in the end, only the wealthy and their investments abroad, but sucks the taxpayer dry.

Our national priorities, needless to say, are sick and twisted.  Look for me to be manning the barricades in twenty years as a member of the New Gray Panthers.  If I'm old and on the street, I'll have nothing to lose.  So why not start some serious shit?

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