Most people are soft-minded lemmings looking to simply escape from reality into whatever liquid plasma screen display they have at their disposal. They don’t think about anything but today, figuring the Gubment will take care of them if they ever really need it. Bankruptcy, forgiveness of bills, foreclosure and so on may loom and be stressful for many, but once out of those woods, they can go back to spending without care once again. While savings rates may have increased a little, it’s a drop in the bucket for what they really need financially to get out of the workforce one day.
We’re already seeing the impact of those delaying retirement, which trickles down to our younger generation(s) not being able to advance due to the top and middle parts of the workforce ladder simply staying where they are. The US and global economy hasn’t grown enough to support the glut of new additions to the workforce (especially those with degrees without value) and with fewer people getting out of the game, we see a lot of under and unemployment by younger generations.
Now the reason older people are still working is because they’ve squandered a huge stock market and lifestyle increase on materialism and economic destruction, while at the same time not saving hardly at all. If you believe a recent USA Today article, 36% of people have less than $1,000 saved for retirement and only 22% have over $100,000. Now according to the chart below, less than half of all workers have access to any kind of contribution benefit plan (403B, 401k or pension) and only 3% of workers have a pension. That means over 50% are left to their own devices to save for retirement, and you can guess how that is going.
According to this Retirement Statistics site, the average 50 year old has saved just $50,000 toward retirment. This is really scary stuff people, and most people look like they’ll be working into their 70’s. Despite our growing trends of American’s to try and kill themselves with obesity and crappy lifestyle choices, through the miracles of modern medicine, we are still living longer.
The Social Security Administration has slowly been increasing the age which you can start to receive full benefits. It used to be you could collect full benefits at 65 years of age, but now they make you wait until you are 67 years old (for those born in 1960 or later). Based on the glut of baby-boomers on retirement’s doorstep and longer lives, the age which you can receive SS bennies will continue to either creep up or decrease benefit amounts, likely both. By the time I retire, I’d expect full SS benefits may not be given out until early 70’s. In 1950, men were expected to live 12.7 years while receiving SS money and 15 years of SS for women. Life expectancy, and thus amount of money needed to support those on SS, have both increased. So while we have to pay bennies an additional 5 years they’ve only increasing the age in which we take benefits by two years, which is a major problem when the largest generation in history is on the verge of sucking those bennies up. No wonder why SS is a total mess.
Basically, expect old people to keep working in some manner into their 70’s, since it is likely even with SS they won’t be able to have the lifestyle they’ve grown accustomed to, while spending every penny of every paycheck. It’s not going to be pretty out there people, for those of us in the younger generation as we get older. We’re already shouldering a large portion of the population (according to this CNN article – 49% of American’s receive some type of Gubment assistance – about 30% received SS, 30% medicare, 30% food stamps, other with unemployment, veterans assistance, subsidized housing and other stuff). Just wait until the percentage of people receiving government assistance rises even more, likely to be a higher percentage than those in the working class that actually pays for those benefits. When will the people rise up against this pyramid scheme or at least make it economically viable? I believe it will literally become a generational war at some point unless something changes.
Regardless of the SS outcome, let’s not make the same mistake the previous generation made. Assuming society as a whole stays solvent, which is somewhat of a question in a lot of people’s mind, we should be frugal and eliminate debt while also trying to build wealth through saving measures. If you’re one of the 50% without access to an employer savings plan, open up an IRA (it’s really not that hard), or at least start socking money away in a savings account that you can hide from yourself. Do anything, just start. I’ve discussed our general plans of starting to prep, while at the same time trying to have a happy middle-class life while saving 20+% for the future. It’s a balancing act, but it sure the hell beats living off of dog food and government cheese.