Can You Afford to Retire?

Can You Afford to Retire? is a documentary from the acclaimed PBS public affairs series Frontline, which investigates the looming financial catastrophe facing the baby boom generation — a group blessed with long life expectancy but bedeviled by shrinking incomes. The erosion of traditional pillars of retirement income — Social Security, lifetime pensions and 401(k) plans — has many boomers working well into their retirement years, a trend that could eventually threaten the whole economy.  This show is done in 60 Minutes style; not boring, instead, it’s an eye-opening warning and caveat. Numerous examples are shown. Shows how little we are saving and how much money we will need to retire, according to actuarial tables. Americans paid into corporate pension funds and wound up marginalized and impoverished after corporate restructures. This film details how companies encouraged their employees to go with plans that wouldn’t give them the retirement benefits they expected. It is sad to see how profit triumphs over human welfare, and how people are hurt by not being able to retire after having given a lifetime of work to their employers. This film shows the real pain that elders are subjected to because of greedy companies that are quick to abandon their promises to their workers.  Forcing regular working people to speculate in the stocks and bonds markets for their retirement security is revealed here as the trap it is. The myth is the assumption that we should all be stuffing our savings into the stock market because over time the average value of stocks goes up. For myself, the more I know about insider deals and fraud in the stock market, the less I want to invest (gamble) in the market for my retirement. Wake up America. We are all getting the shaft, and it’s only going to get a lot worse. When will the middle-class finally decide that enough is enough? What will happen when enough Americans wake up and realize that the only people with decent pensions these days are the very government workers who are supposed to be serving the public trust?  Why do my taxes fund all kinds of very lucrative pensions for government employees, while I have no pension for myself? Several myths are perpetuated, including that you’re not smart enough to plan and invest on your own. It shows a lot of people who never took a look at their 401K allocations, lost big time, and are now upset about it. Everything is someone else’s fault, and the government needs to get involved. Anyway, it does make you think – especially if you are counting on a company pension to carry you through retirement. There are some cases where the pensioners got left out in the cold because their company promised a pension for forty years, then backed out of its obligations. However, in most cases, the retirees have fallen victim to their own apathy — they didn’t contribute to their retirement plans, they didn’t choose an investment, and got stuck in the Super-Safe Ultra-Low-Yield Fund, or they assumed Social Security would be enough to fund their retirement (current benefits are around $12,000 per year). They show one person who’s actually doing okay, but they’re quick to note that he holds an MBA, as if to say that only brainiacs can hope to pierce the mystical voodoo fog of Wall Street. This is ridiculous, and in my opinion, harmful, as it discourages non-brainiacs from even trying to save for retirement. Anyway, the documentary demonstrates that in just two generations we Americans are viewing retirement as a ‘right’ — not a privilege that has to be worked for. Sounds like health care. Perhaps most annoyingly, the academics interviewed speak as if retirement is a Constitutional right, something that every generation in recorded history has enjoyed; in reality, middle-class retirement was quite rare until the rise of labor unions in the early 20th Century; before that, “retirement” was what happened when you became too old and frail to work any more, and you either lived off of personal savings or you moved in with your children. Bottom line, the message of this should be that you, and only you, are in charge of ensuring that you’ll have enough money to retire. The message this conveys, however, is “I didn’t plan ahead, I didn’t save any money, so now I have no money saved, and it’s all the Big Bad Corporation’s fault.”  Referring to a line from this film, I am one of those underlings who might bring coffee into a meeting, but who is forced to manage my own IRA. Even though I have always earned a very modest salary, I have made the effort to learn about investing by visiting my public library and reading all the financial material available there. I continue to go online to keep up with all the latest financial news and recommended strategies. So I am self-taught in financial matters. Now two years away from retirement, I am on track to end up with a combined sum of from $750,000 to $800,000 in my 401(k) and IRAs when I retire — not too bad for an underling who brings the coffee in!  This film is a mind boggling summary of the situation most of the baby boomer generation faces as retirement looms closer and closer! It’s the best incentive and motivator to go out and do something before it’s too late. Collectively we have a real potential tragedy on our hands. Does the notion of working until the age of 85 seem daunting? It’s a real possibility for many. The real question is will there be enough jobs for the onslaught of retiree workers entering the work force in droves? If not, what type of downsized life are we talking about for these retirees — many out of money, without pensions, without savings and without health insurance for those who can’t find sufficient employment or who are unable to work? There are many facets to a healthy, financially comfortable retirement, not the least of which is a reevaluation of one’s needs and desires.  Find a way to put aside some money every payday. Get over the idea that you have a god-given right to spend decades taking cruises. As a healthy sixty-year-old, I’m not expecting to put myself out to pasture in five years. As for social security, at least check Wikipedia and get an overview of how it works.  This film is a must-see.  Documentary Frontline 2006.

 

SEE ALSO:

The Company Men

Flying Cheap

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