America's retirement crisis

An amazing 45 percent of all American households with people still in their working years have nothing at all saved for retirement. Among those aged 50 to 64, 75 percent have less than $28,000 put away. Even among the most prepared Boomer households, savings average just $140,000, far too little to fund a 20-plus-year retirement. According to the National Institute on Retirement Security, Americans are at least $6.8 trillion short of what they need for a comfortable retirement.

As a result, the U.S. stands on the edge of what many experts call "a retirement crisis." Nearly 60% of middle class people nearing retirement are on track to outlive their nest eggs and will be forced to rely on Social Security to get by. But with the average Social Security payment for individuals averaging less than $15,000 a year and $22,000 for couples, many middle-class Boomers will face sharply declining living standards in their 70s and 80s.

The director of the Schwartz Center for economic Policy Analysis at the New School for Social Research said, "This is the first time that Americans are going to be relatively worse off than their parents or grandparents in old age."

There are a lot of reasons for this: robbing our 401(k)s while we're still working, companies and corporations doing away with pensions, putting off retirement savings too long when we're young, or not having any retirement savings at all. It's been said that wisdom is wasted on the old because they don't have the energy to do anything with it and energy is wasted on the young because they lack wisdom. The latter certainly makes sense for those who thought they were going to live forever when they were younger and now that they're approaching retirement, they're totally unprepared for it.

With the Boomer population larger than any retirement group in the past, many are looking at going to the poor house if they retire, totally opposite of where they thought they would be when they were young, vibrant and optimistic about their future. As a result, many are simply choosing NOT to retire. Workers are staying at their job longer than ever before, often into their 80s, just to be able to continue the life style they've been leading.

Most of the economic experts think that's a bad thing but I'm not so sure. Much satisfaction is gained from working and being productive. In my Intro to Sociology classes, we talk about the values that Americans cherish the most and work and activity always show up on the list. We admire those who work, we don't admire those who are lazy. Working gives one a purpose, a reason to get up in the morning, if you define your work as valuable. I knew a man in his 80s a few years ago who got up every morning and went outside to chop a rick of wood, even though he had sold his telephone company and didn't have to worry about money at all. He told me he had worked since he was a young teenager and if he sat in the house and watched soap operas with his wife, he figured he would be dead in six months. And, in fact, many DO die not long after they retire because their purpose for living disappeared when they quit their jobs.

On the other hand, there are many Americans working at dead-end jobs that provide them with little if any job-satisfaction or purpose but feel like they must continue to work because they don't have enough money in savings and Social Security to retire. There's an old automotive advertisement that said, "Pay me now or pay me later" and the people who weren't far-sighted enough to plan adequately for their retirement are living that adage today.

Some of us are prepared but many aren't and it's too late now for them to do anything about it except to keep on working. The best thing you can do for your children and your grandchildren is to make sure they start saving for retirement in their very first job, never stop, and never take any money out of that fund until they retire.

Because if they make the same mistakes their parents and grandparents made, they'll be in the same sad shape.