Tag Archives: retirement

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.)

Rob Rogers Matters

It seems right to thank Rob Rogers in kind: when the corrupt LA Times fired me, he watched my back with his own thoughtful observations about my plight.

Rob was fired today by the Pittsburgh Post-Gazette, where he had worked for the last 25 years. Overall, he has worked as a professional full-time political cartoonist for 33 years. This was not your garden-variety “let’s lay off the cartoonist so we can pay upper middle management even bigger bonuses” dismissal. After a couple of years of serious handwringing on the part of America’s Democratic Party-dominated editorial cartoonist community, Rogers has emerged as one of the first true victims of a Donald Trump-inspired purge.

Determined to move the P-G into a more pro-Trump editorial orientation, the publisher brought in a new editorial director, Keith Burris, whom he charged, among other things, with either bringing Rogers in line — convincing him to either draw pro-Trump cartoons or simply lay off the president entirely — or figure out a way to get rid of him. Anyone who knows Rob Rogers, or for that matter any decent political cartoonist, could guess that the odds of him agreeing to change his political orientation 180° was likely to fail. What the Post-Gazette wanted was a throwback to the political cartooning of over 100 years ago, when publishers dictated the cartoon that appeared in the next day’s paper. Financial pressures have been extraordinary against cartoonists but few have acquiesced to such rollbacks and Rob Rogers was certainly not going to be one of them.

So instead they decided to kill one of his cartoons. And another one. And another one. By the time they showed him the door, well over a dozen cartoons in a row had been drawn but failed to appear in print.

I’m not sure I really understand this tactic. I didn’t go to business school. I would imagine that humiliating and harassing someone into leaving works best when they can easily find another job in their chosen profession. That’s not really true in journalism.

If there’s a class about how to fire people at any decent business school, they should probably use the Rob Rogers firing as an example of exactly what not to do. Look, it’s their paper. They can publish or not publish whoever they want. Maybe it’s crazy for a city like Pittsburgh to have a pro-Trump newspaper but that’s their prerogative if they want to go under. They had the right to fire him.

But why do it that way? Why not simply call him into the office, explain the fact that the editorial orientation of the newspaper had changed, and offer him a generous severance package (I would think two or three years salary would be sufficient) along with full retirement? And send him out with a little bit of glory and dignity, allowing him to say his goodbyes in cartoon form and perhaps showcasing a few pages of his best cartoons over the years? 25 years of loyal service earned him that. More than that, Rob is a fixture in the community. He is always front and present, organizing and hosting cartooning-related panels and shows at art galleries. Disappearing him like a Soviet apparatchik airbrushed out of photos from the top of Lenin’s tomb is a little insane.

Alternatively, why not simply make clear that he could stay on board as a liberal cartoonist even though the editorials would be conservative? My former employer the Los Angeles Times did that with cartoonist Mike Ramirez in the 1990s, but in reverse. The paper had a liberal editorial orientation but Mike was very conservative. Many newspapers with a specific editorial orientation run columns by columnists whose politics disagree with them.

Rob deserved better than to be given the bum’s rush. I suspect that much of the national media will focus on the Trump aspect of the story but I think the real issue is the cruel treatment given to a loyal employee who never did anything wrong and wasn’t even accused of doing anything wrong. I don’t know how that publisher or that editor can live with themselves.

They’re both disgusting.

Time To Go: Please, Boomers, Just Retire Already!

Originally published by Breaking Modern:

It’s too bad, but Baby Boomers continue to belie generational stereotypes. In a recent survey, they overwhelmingly say they either feel too healthy or too financially insecure to retire at the normal age 65. Even to the bitter end, they continue to overshadow Generation Xers and Millennials who need them to step aside gracefully and make room for them.

Sardonic to the End

SYNDICATED COLUMN: Lead, or Follow and Get Out of the Race

Voters Turn Against Pols’ Follow-the-Polls Strategy

In order to be a good leader, Disraeli said, “I must follow the people.”

Aided and abetted by toe-sucking pollster Dick Morris, Bill Clinton finessed the art of leading from the rear, relying on Morris’ tracking surveys to help him decide everything from whether to bomb Serbia to when and if to take a vacation.

By definition, however, leaders point where their followers should go. Americans haven’t seen much real leadership on the federal level since Reagan. Where there’s been progress, such as on gay rights, the President only stepped forward after public opinion had shifted enough to make it safe.

For the first time in 30 years, Dick Morris’ follow-the-voters strategy appears to be running out of steam. This year, the electorate seems to be hungering for presidents in the mold of TR, FDR and LBJ—old-school leaders who painted ambitious visions of where America could go and why it should, who took political gambles that the people might not be ready for what they had in mind, who anticipated crises and challenges before anyone else, and explained why we had to act sooner rather than later.

The craving for leadership is evident in the polls. Though personally popular and enjoying the advantages of incumbency, President Obama is running neck and neck against Mitt Romney, an awkward candidate from a minority religion who has trouble connecting with, and is seen as out of touch by, ordinary voters.

Democrats must be worried. Historically, Republican presidential nominees typically gain on Democrats throughout the fall. At this point in the game, Democrats need a substantial lead in order to emerge victorious in November.

What’s going wrong? Mainly, it’s the economy. It sucks. Still. Democrats say the President inherited the meltdown from Bush. But Americans blame Obama.

“The nation’s painfully slow pace of growth is now the primary threat to Mr. Obama’s bid for a second term, and some economists and political allies say the cautious response to the housing crisis was the administration’s most significant mistake,” reports The New York Times. Obama’s big screw-up: “He tried to finesse the cleanup of the housing crash, rejecting unpopular proposals for a broad bailout of homeowners facing foreclosure in favor of a limited aid program—and a bet that a recovering economy would take care of the rest.”

Recovery? What recovery?

The depressed housing market, coupled with the reduced purchasing power of tens of millions of Americans who lost their homes to eviction and/or foreclosure, makes recovery unlikely to impossible for the foreseeable future.

Many people, including yours truly, warned that the millions of Americans who were evicted under foreclosure, many of them illegally, were more “too big to fail” than Citigroup. Some, like former Congressman Jim Marshall (D-GA), voted for TARP, but urged the Obama Administration to condition the bailout on forcing the banks to refinance mortgages and write down principal to reflect the new reality of lower housing prices. “There was another way to deal with this, and that is what I supported: forcing the banks to deal with this. It would have been better for the economy and lots of different neighborhoods and people owning houses in those neighborhoods,” Marshall says.

Voters aren’t mad at Obama for not being clairvoyant. They’re pissed off because he ignored people who were smart and prescient in favor of those who were clueless and self-interested, like Tim Geitner. He may be about to pay a price for that terrible decision.

Tens of millions of Americans already have.

Speaking of leadership—the art of seeing what comes next and doing something about it—what looming problems are the political class ignoring today?

It’s too late to stop the 2008-to-2012 economic meltdown. But it’s still possible for Obama (or, theoretically, Romney) to get ahead of the economy—permanent unemployment benefits, anybody?—and other pressing issues.

Australia, for example, is taking the climate change crisis seriously.

Americans want leaders who point the way forward, to anticipate monsters we can’t yet imagine. For example, there is a huge looming crisis: pensions. In 10 to 15 years, Generation Xers will hit traditional retirement age. How will they eat?

Close to none have traditional defined-benefit pension plans. Gen Xers, who earn far less than the Baby Boomers at the same age, have been shunted into 401(k)s, which turned out to be a total ripoff: the average rate of return between 1999 and 2010 was 0.3 percent.

Total.

And much of that was withdrawn—under penalty—to subsist after layoffs.

“[Gen Xers] have no savings, and what they had was devastated by two market crashes,” said Andrew Eschtruth of the Center for Retirement Research. “They never got off the ground.”

If you’re 45 years old now and just beginning to save for retirement, financial planners say you should save 41 percent of your income annually (if you haven’t gotten laid off again). As if. Half of Gen Xers live hand to mouth; the rest save a piddling six percent a year.

The Gen X retirement crisis represents 46 million people waiting for a savior—and 46 million potential votes.

Attention Mssrs. Obama, Romney and anyone else presenting yourself as a would-be leader: Don’t just read the polls. Don’t follow us. Show that you care about, and have a credible plan to confront, the problems of the future. If you do that—and we’re not holding our breaths—we’ll pay attention to you.

(Ted Rall’s new book is “The Book of Obama: How We Went From Hope and Change to the Age of Revolt.” His website is tedrall.com. This column originally appeared at NBCNews.com’s Lean Forward blog.)

COPYRIGHT 2012 TED RALL