SYNDICATED COLUMN: Who Will Do Something About the Looming Retirement Crisis?

Image result for elderly homeless

In Douglas Coupland’s 1991 age-warfare classic novel “Generation X” a young man trashes a car because it bears a bumpersticker with the obnoxious slogan “I’m spending my children’s inheritance.” Like Coupland I launched my career as something like a spokesperson for Generation X, raging on behalf of a demographic cohort perpetually struggling to make itself and its concerns heard in the wake of the older, bigger and wealthier Baby Boom generation. Culturally marginalized by the Boomers, forced to accept transient employment, hobbled by growing student loan debt and buffeted by recessions, Xers feared that they would never be able to save enough in order to retire, much less spend their kids’ inheritance.

The retirement crisis will be worse than we ever feared.

“We predict the U.S. will soon be facing rates of elder poverty unseen since the Great Depression,” New School economist Teresa Ghilarducci and Blackstone executive vice chairman Tony James write in the Harvard Business Review.

Sayonara, Kurt Cobain. Born in 1961, the oldest Xers are graying, aching, 57. And in trouble. A New School study projects that 40% of workers ages 50-60 and their spouses who are not poor or near poor will fall into poverty or near poverty after they retire.

Retirement specialists from the political left and right concur: big segments of whole generations of the elderly will soon be impoverished, some homeless or even starving. After the Xers, the Millennial deluge; old age looks even bleaker for today’s young adults.

Experts vary on how much you should have saved by the time you retire. Fidelity advises a $75,000-a-year worker who retires at age 67 to squirrel away at least $600,000 in present-day dollars. Following the traditional rule of having 80% of your salary for 20 years pushes that desired minimum to $1.2 million.

The problem is, the average savings of 55- to 64-year-olds is a piddling $104,000. According to a 2015 study of people 55 and older by the General Accounting Office, 29% have nothing whatsover.

It’s a joke, but it’s not funny. Yet neither political party has much to say about the looming retirement crisis.

The rapidity and scale of downward mobility among the elderly will shock American society, precipitating political upheavals as dramatic as those we saw during the 1930s. Political and business leaders are in denial about this issue. But the desperation of our grandparents and parents — not to mention the children charged with caring for them since they won’t be able to provide for themselves —will make voters vulnerable to demagoguery of all stripes. Instability will be rampant. Democracy could be in danger.
It isn’t hard to see how we got here.

Old-fashioned defined-benefit pension plans have been replaced by defined-contribution benefit plans like IRAs and 401(k)s which are problematic for many workers. People don’t contribute enough. Employers pitch in less than they did to pensions, or nothing at all. When workers suffer a setback like a job loss, they borrow against their accounts. They make poor investment decisions. When the stock market suffers a downturn, accounts lose value. High administrative costs suck away returns. The average 401(k) has never been bigger — but still, we’re talking total savings of $104,000.

Try living on that for 20 or 30 years.

Baby Boomers enjoyed the last vestige of an economy where you might hold one or two jobs throughout your most of your working career. They grew up in two-parent households and enjoyed the fruits of the postwar boom.

By contrast, many Generation Xers and younger Millennials have divorced parents, which reduced their financial security. Gen Xers got slammed by the 1987 stock market crash as well as the 2000 dot-com collapse; both Xers and Millennials lost jobs and savings during the 2008-09 Great Recession. They work in the gig economy. Younger workers might not have to drive for Uber or rent out a room on Airbnb but their work lives are highly mobile and frequently disrupted. They get laid off and outsourced. They must go back to school or move to adjust to employers’ demands. Their real and net incomes are significantly lower than the Boomers’ and their savings rate reflects that.
Paying average monthly benefits of just over $1300, Social Security is a supplementary, not a primary retirement plan. Even if they’re content to live modestly, cash-poor Xers have a gaping wound for which Social Security is a Band-Aid.

Although many older people enjoy working, too many cannot. A record 19% of Americans over age 65 currently work at least part-time; of course, that means that 81% do not. Older people are prone to failing health. And it’s hard to find someone to hire them.

The older you are, the more likely you are to fall prey to age discrimination. Companies are also motivated by simple economics, cutting costs by firing older workers and replacing them with younger ones.

Hillary Clinton ignored the distress of downsized working-class whites in flyover country to her own, and her party’s peril. Donald Trump won his surprise victory partly because he acknowledged the rage of Rust Belters long neglected by both parties. The outcome might have been different had Democrats maintained their traditional 20th century focus on labor and the Midwest by promoting job-retraining programs and other attempts to get industrial workers back on their feet.

Now we’re looking at a problem as big as deindustrialization. If one of the two major parties is able to get ahead of the coming retirement crisis by putting forth some meaningful solutions now, before dystopia arrives, they will reap the benefits at the polls. Conservatives may want to support GRAs (Guaranteed Retirement Accounts) in which workers are required to withhold a portion of each paycheck in order to invest for their retirement. Liberals may prefer shoring up the Social Security system in order to increase monthly payouts.

Or we can do nothing as we marvel at the sight of our grandparents fighting over Dumpster scraps.

(Ted Rall (Twitter: @tedrall), the political cartoonist, columnist and graphic novelist, is the author of “Francis: The People’s Pope.” You can support Ted’s hard-hitting political cartoons and columns and see his work first by sponsoring his work on Patreon.)

28 thoughts on “SYNDICATED COLUMN: Who Will Do Something About the Looming Retirement Crisis?

  1. Don’t worry NOTHING will be done other than more speeches to divide people into factions that can’t agree on anything so nothing will be done while the 0.01 percent can rake in even more. The media and politicians will get their cuts so they won’t sand up. If you where in media or politics and had some feelings would you risk your families future for the homeless when head of your party or network, is opposed to real change?

    When the homeless become too much of a problem, laws will be passed to drag the homeless off to equivalent of interment camps: government surplus soup and bread, minimal medical care to prevent epidemics and a cot. The liberals will wail but they majority will remember all the times they where robbed all the shoplifting, all parks filled with disease and misery. In another time the anti-homeless laws would seem unconstitutional but court will be so packet with right wing judges the war on poverty will stand.

    If the people where real activist they already be fighting for higher wages, more severer punishment of corporate criminals and end to tax shelters and breaks for the 0.01 percent.

    • Don’t worry about the elderly being freeloaders everything they own will liquidated, part will go to gov0erment and part to corporate run senior and disabled reemployment center to pay for minimal medical care. The seniors and disabled that are not in last days will given jobs nobody wants like electronics and plastic recycling (picking through the garbage)to earn their gruel and cot.

  2. Piss-poor choice of a photo to illustrate your thesis that the so-called Baby Boomers have screwed over younger generations, particularly your own, Ted : if the information on the placard she’s holding up is correct, the woman was born around 1920, i e, rather than a Boomer daughter, she might well have been a Boomer mother (or a childless member of that generation). Once again we see the inanity of «identity politics» – don’t trust anybody over 30 – but I have to admit I didn’t expect to see expounded by you, even if trolls who deligt in such «explanation» seem to have become more frequent on your site. The issue here is hardly one of a battle between generations (pace, Jefferson !), but as always, one of class conflict – whether the state should engage in transferring money from so-called «productive» generations, i e, persons at the age to be «gainfully» (as the phrase goes) employed, to «improductive» ones, i e, children and the elderly, who it was thought, should received support even if not available to the labour market – is irrelevant to the rich, whose children and elderly do very well, thank you, but vital to the poor and the so-called «middle classes», where these groups do not without these transfers. Since the latter make up a so much larger proportion of the population than the former, aggregate demand drops sharply when they are impoverished ; that, of course, was the main reason why Social Security was introduced by the Roosevelt administration back in 1937, i e, more as an economic recovery measure than one to good-heartedly succour the needy. Afterward when it was (re)descovered by the Truman administration in 1947 that the best of all economic stimuli, war and preparations for the same, rediscovered, after which the US has been more or less continually at war, making the world safe for the military-industrial complex (about which Mr Eisenhower warned, some three days prior to his second term of office ended, but which he did everything to encourage during his presidency) the need for this redistribution to keep the economy working even for the rich was called into question, and it now seems to be on the way out entirely….

    The problem thus is not some vicious but imaginary war by the Boomers on Generation X and its successors, but by the quite real and entirely successful war carried out by right-wing politicians of both the so-called «major parties» in your country (and others as well) on the gains made during the New Deal, decrying them as «communism» and «socialism» (and unions, of course, as the Devil’s spawn) and contrary to the «freedom-loving» nature of the good people of the Shining City on a Hill, if not direct treason, which it often was proclaimed to be (then it was «Moscow gold», now it’s that dastardly Gospodin Putin, who uses pseudonyms to post on Facebook). One gets what one pays for – if one listens to politicians who proclaim that lowering taxes and putting an end to, e g, all programmes at the Federal level which don’t go directly the War (oops ! – «Defence») Department and the alphabet soup of the (un)intelligence agencies will usher in the Second Coming (or, at the very least, the Rapture), then one can only expect the results we now see : crumbling infrastructure, pensions impossible to live on, education costs far beyond the reach of most and crippling even to the majority of those who do manage to find financing, the impoverishment of the erstwhile «middle class», a huge increase in the number of working poor, coupled with interminable wars of aggression abroad….

    Blaming the Boomers is like blaming those dastardly Russians (or the equally nefarious Chinese, who have, it is claimed, been «raping» you for decades) ; it may feel good, but it is utterly irrelevant to the problems most people in the United States are facing and serves only as a convenient distraction expressly designed to keep them from putting their heads together and devising a real solution to their difficulties. McCarthyism 2.0 and die gelbe Gefahr 2.0 are no better than thier 1.0 versions, and neither they nor «generational warfare» will get you where you want to go….

    Henri

  3. I have said it before and will repeat: the generation-competition “analysis” is simply another of many public methods (that, together, constitute the “American Soft Totalitarianism©”) that are promulgated prevent individuals from thinking about uniting together against the rank injustices that outnumber even the propaganda memes.

    • Yes. Social Security did not get enacted because FDR said it was a good idea; people organized and demanded dignity for the retired. Now we seem to wallow in Thatcher’s TINA(There is No Alternative) and have accepted capitalistic hyperindividualism. The demise of the union movement has contributed to this and did not help. People need to learn to work together and work for change.

  4. Ted,

    Generational breakdowns are iffy, but take these 18-year groupings
    Baby Boomers 1946-1964.
    Gen X 1964-1982.
    Millennials 1982-2000.
    Gen Z 2000-2018.
    (Which means that we are, right now, coming up on, what, Generation Alpha? Generation Trump?)

    Anyway, the math is kind of terrifying.

    First, let’s look at the Millennials. I’ve had the pleasure of working with some VERY competent Millennials, but they are the exception. A significant proportion are poorly educated, easily distracted, and self-absorbed to a degree that is truly staggering. Additionally, they appear to be completely separated from reality. Look at every place Hipsters crop up. Rents go into orbit. Why? They’ll pay idiotically huge amounts of money. That isn’t all their fault. To a lesser degree, that’s my generation’s fault and, to a larger degree, it is the Baby Boomers’ fault. If the main breeding age of humans is between 20 and 35 (if you stretch it to 40, it’s even more a Baby Boomer fault), then parent-of-Millennial birth years can be estimated at 1947 (a 35-year-old having a baby in 1982) to 1980 (a 20-year-old having a baby in 2000). Although the Millennials are an overlap of both prior generations, Generation X had fewer children than the Baby Boomers did (because there were fewer Gen Xers and also because of economic instability. If you couldn’t get stability, you couldn’t have children–or had fewer children).

    Second, let’s look at the power structure. Baby Boomers enjoyed LONG periods of employment stability, unions, job protections, pensions, etc. College tuition was much lower. Remember all those Boomer political ads about how Sen. X put himself through college waiting tables? Exactly. Those ads don’t go out anymore because the cost of college is hobbling now. Tuition was a manageable expense for the Baby Boomers (and the very earliest Gen Xers). Mortgages? You’d be an idiot not to get one, what with job security and raises and union protections. By the time neo-liberalism got going in the U.S., a lot of Boomers had had a number of years to really pile on the bennies and feather their nests. They were in charge, and they screwed over Gen X every chance they got. (As I recall, the only time I ever got a raise was when I changed jobs. Got lots of responsibilities, lots of increases in responsibilities, but never a raise. Somehow, there was never enough money to swing that. And the pay increases by switching jobs? Oh, maybe $1,000 a year more. And the Boomers were the first ones to caution me that I didn’t want to switch jobs too often, it would make me seem like I was only in it for the money.)

    Third, Gen X was the first generation to do worse (on average) than its parents. Look at what Ted mentioned: three major economic crises in 32 years. What do you think the cumulative effect of that was economically and emotionally? Kids? Are you high? When I can be outsourced tomorrow and minimum wage puts you under the poverty line? A house? Who’ll give me a mortgage for anything habitable? The general rule of thumb is that you mortgage three times your annual salary. If you live in ANY metropolitan area, you are automatically priced out of the market unless you are making a six-figure salary.

    Conclusions? I strongly suspect the Millennials will be a repeat in many ways of Gen X. The big problem Gen X faced was that we had the political anger, but we weren’t able to overcome the Boomer numbers. And then they rigged the game and kept us so busy busting out humps to stay alive that a lot of us just gave up. The Millennials? A few of them get it, even now. But they will not be able to activate enough political anger. Too many of them tweet and then take pictures of what they ate for lunch. They will subsist for a very long time on the remnants of their parents’ fortunes. By the time they piss through all that money, it will be far, far too late. But their archive of outraged social media postings will provide much useful data for future generations of Chinese scholars to describe how America fell apart in the 2050s: an electorate that consisted mostly of self-congratulating non-achievers who thought retweeting and “signing” electronic petitions meant something.

    Of course, we’re right about at the time for another economic collapse. That should be quite a wake-up for the Hipsters. I’d mention terrorist incidents in the U.S., but, really, how much worse can we get over here? We’ve already got the closest thing we’ve had to a police state since the HUAC rolled out the pitchforks and torches. I doubt another incident would do that much more to undermine what freedoms we still have left to lose.

    • > A significant proportion are poorly educated, easily distracted, and self-absorbed to a degree that is truly staggering.

      Funny, I heard the same about Gen X…

      • As a Gen Xer, I know how well I was educated. As someone who has taken college-level courses as a student throughout his life, I have seen the drop off.

        Attention spans are GONE. In multiple courses, students turn and start talking to each other while the teacher is lecturing. And I don’t mean brief little exchanges that are germane to the coursework. They are BORED. And they speak LOUDLY.

        The ability to do math in your head? In one class the teacher said something like, “So that’s 28 times 7 …” And nodding along, I replied “196.” And the teacher was amazed that I could do that so quickly..

        Gen X goofed off, sure. But we were the generation that did NOT have parents helicoptering around, screaming at the teacher if Cayden or Hunter didn’t get a participation award for showing up.

        The Internet, computer printers? Didn’t exist, rare as hen’s teeth. You had to get the books, read them, and write about them. Study guides? Sure, those were available, but they cost money. Now? It’s all for free online because some thoughtful soul has violated copyright to make sure you can get the whole damned book on pdf. Search for all the terms you need.

        Again. NOT ALL Millennials are vapid simpletons. NOT ALL Gen Xers were geniuses. But in the aggregate, the Millennials are not “replacements.” Being able to use Vimeo to split the tab? Hell man! When I went out on a bender with friends, we could still add up the tab. I’ve seen the attention spans of students; it’s been a downward curve for years and years.

      • @Alex – they said the same thing about the boomers as well, but I forgot to mention that part. 😀

        One of the things I do like about the Millennials is their social consciousness. They don’t understand all the noise about minority rights because they started out believing all [X] were created equal in the first place. (I”m generalizing, of course. There are still far too many racist, sexist homophobes in their ranks – but the relative proportion is declining)

        We boomers were raised on TV, the Millenials with phones in their faces. How will their kids connect and will they disconnect even more from reality?

        Matrix, here I come!

      • If everyone is created equal, why are most countries hellholes filled with people trying to leave them?

      • >attention spans are gone.

        You tell the kids something and two minutes later, I hear, “wait, what do you want us to do?” I don’t repeat myself. It just encourages them. I tell them to ask a friend.

        They can’t shut their little mouths so I talk as little as possible, just giving them their work.

        They can’t read an entire book.

        But don’t take my word for it. Said one of the better and nicer students, a class officer and Eagle Scout, “These students are just unenthusiastic.” And I would add, a waste of time.

        They don’t need twelve years of schooling and then however many years of college since they are not really doing work. Studies have shown college students spent most of their time hanging out and then using mental health services due to anxiety because they can’t do the work.

        Moreover, they know how lazy and disrespectful they are. “There’s something wrong with us,” they’ll admit in class.

        The only place where I have seen students who are respectful is at a very religious, Protestant evangelical school about a mile from where I live. I know that people on this site knock religion, but the kids at this school take one back fifty years and are amazingly nice. I don’t know how they will survive in the larger world.

        Rod Dreher’s The Benedict Option talks about retreating from this world and forming your own separate albeit religious communities. Not a bad idea.

      • AT,

        Yes. I knock religion. I knock politics and (pretty much) all politicians. I also knock the people who argue about Trump. Here’s one: Trump calls Africa a hellhole. EVERYONE starts shrieking about how he’s wrong and racist to say it. But significant portions of Africa ARE bad places to live: female genital mutilation, disease, poverty, failed governments, corruption. I call that a hellhole. Could Trump have been a little more precise? Yes. But he’s a oaf. Now, all I see is people shrieking about how the places these people at the border have escaped from are HELLHOLES. It’s a complete double standard.

        Now. Moving on to religion. Which I knock. The school you praise succeeds not because of religion, it succeeds despite religion. What the school has is discipline. The teachers have authority AND they use it. The main reason I WILL NOT become a teacher is because I will not put myself in a position of having to try to negotiate with a room of teens for the authority which has to be given to me in order for me to teach in the first place. You conflate FAITH with SUCCESS. Put one of the Protestant teachers in a public school and see what happens. Daniel made it through a lion’s den. Your teacher will either quit in 20 minutes, get sent to the hospital in a stretcher or be taken out in handcuffs.

      • AlextheTired,

        According to the shrieking people, there are only hellholes because of the United States. The rest of the world would be a paradise were it not for the United States and that is why everyone must be allowed to migrate to the West.

        But on some level, people make their lives and when they change their lives, their world changes as well.

        This school has discipline, the teachers have authority, and the kids are very well raised. It is a couple of miles from the public schools in the area. Remove the religion and you remove the discipline and authority and the kids will not be raised as well. The Protestant teacher will become like yours truly.

  5. And by the way, why isn’t the leftie media moaning about this? Shouldn’t Rachel Maddow be tearing up over the elderly who don’t have enough food or heat? Shouldn’t migrant photographer John Moore start taking pics of poor, old people?

    Is it because the pensioners are largely white and the leftist media is only interested in the so-called woes of racial minorities?

    • New flash! Ted is a member of the Leftie Meida. Hey, lookit this

      It seems like the leftie MEDIA does report – the question is why you are unaware of it. It was Reagan that f’d up Social Security, and it’s the righties who are continually trying to undermine it further.

      • Migrants, migrants, migrants. These scammers have overwhelmed all other reporting.

        Democrats steal from social security all the time. The project, while noble, does not pay enough to live. Might as well abandon it.

    • AT,

      As for social security and abandoning it? Bad idea. Forget all the socially “pure” arguments about dignity and humanity and so forth. Know why people don’t go on Social Security when they hit 62? It isn’t because they love their jobs. (A few might, but not the majority.)

      The reason they don’t retire is exactly because Social Security doesn’t pay enough to live on. If it did, all the subsequent generations would have jobs. Why? Because you wouldn’t have people cranking along at jobs they hate until 73 because they need to max out the pittance. They’d all leave at 62. The ones who stay? They’d be the skilled ones whose decades of experience actually matter.

      You want to save the economy? Triple the Social Security payout.

      The people collecting it will SPEND it. These people aren’t millionaires. They aren’t transferring funds to the Cayman Islands. They’ll spend it. Why? Because they’ll keep getting it until they die. What 73 year old is going to tuck it away “for later”? Later’s already there. That’s how you end poverty. End poverty and a whole lot of other shitty problems disappear too.

      • > You want to save the economy? Triple the Social Security payout.

        Ay-yup. If you cut it, those of us who’ve paid a substantial percentage of our paychecks for our entire lives are going to be a teensy bit upset.

        Me, I think the deficit portion of SS should be picked up by those who profited the most from Reaganomics.

  6. Another huge upcoming crisis is that of the public pensions that are underfunded and that younger people are not going to be able to pay. Immigrants are not going to want to pay them.

    • They say ignorance is bliss – is that true? Many undocumented workers wind up paying into fake SS accounts on which they’ll never collect.

      Unlike many American Workers :: cough :: they are willing to work hard in order to get by. You know, actually *contributing* to the economy, rather than sucking up unearned salaries.

      While more workers are more mouths to feed, they also provide more labor, thereby GROWING our economy.

      • >fake social security accounts. Oh, so the aliens are doing something else illegal, besides breaking into the United States?

        Illegal aliens send billions out of this country in remittances home. Trump should tax them.

        >growing the economy. Small is Beautiful by E.F. Schumacher

      • > Oh, so the aliens are doing something else illegal,

        No, that would be the employers who are illegally hiring them. You know, rich white men who believe they are above the law? What part of ILLEGAL don’t they understand?

        Funny how you want to prosecute the hell out of people just trying to get by, while ignoring the real cause. It would be much, much, cheaper and more effective to jail the rich white men who knowingly hire undocumented immigrants.

        And hey, let’s take their kids away while we’re at it.

    • AT,

      Ever play Jenga? After a certain number of moves, there is no remaining move that doesn’t topple the structure.

      If there’s an actual Depression, we have no manufacturing base sufficiently large enough to restart the economy. We can’t go to a war footing because there’s no way to pay for it and no way to get the entire country pulling together. Nor is there anyone left to invade in sufficient scale.

      In the previous Depression, the number of people in the stock market was about 1%. Now it’s about 50% to 60%. The initial panic selling will trigger a free fall. It’ll be just like a stampede at a fire. The few rational players will die when the vast horde jam the too-narrow exit. Then the market will be frozen, so that “everyone can calm down.” What that actually means is “so that the biggest players can figure out how to buy up everything at fire sale prices.” The smaller investors will probably be ruined. Your pension? When the dust clears? It may still be there, but a roll of toilet paper might cost $600.

      We didn’t have social security during the last Depression. If we have a Depression, all those old people gots to get paid. And they’re still going to need their medicines.

      The next Depression? It won’t be like the last one. In the 1930s, people could read a book, play a board game/cards, listen to the radio. Now? Once the smartphones can’t connect to the Internet anymore? We’re all dead.

  7. I was smart enough to start a 401k with my first job, and contributed to it regularly throughout my career. But I got age-ismed out of a job, and so am now taking disbursements rather than making contributions. We’re not going to have as much as we’d planned. We will manage to pay off the house – but will we be able to stay there? Property taxes are still going up.

    I did get lucky before I got unlucky as I accidentally stumbled into the right career. Too many people are just scraping by month-to-month, they can’t afford to save up. And yeah, a lot of people are incapable of managing their own finances in the first place.

    We as a society have an obligation to our parents’ generation, they raised us and taught us after all. Is it too much to ask that they (“we”) be comfortable in their old age?

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