EDITORIAL: Never to retire

Source: The Frederick News-Post, Md.自存倉Jan. 05--"I don't believe that I will ever retire," is how 52-year-old Leslie Lynch of Glastonbury, Conn., sees the years ahead. She's spent most of her $30,000, 401(k) retirement savings just to eke by after losing her job at an insurance company in 2012."I don't think my three sons will ever retire," she says of her children, in their 20s.Lynch is representative of what the future will be like for millions of workers across the U.S. and world. Retirement -- that golden age dream of leaving a job aged 65 for freedom and travel -- may have to be retired itself.A fascinating, lengthy and in-depth report by the Associated Press details the impact on the pension system globally as baby boomers -- the generation born following World War II -- head into retirement at a rate of 10,000 a day for the next 20 years. Compounding the coming crisis is the debt and job losses racked up by countries, and stagnant pay following the 2008 recession; people's free-wheeling big spending, big borrowing and lack of saving pre-recession; and companies eliminating traditional pension plans."People are going to be shocked at how little they have," Alicia Munnell, director of Boston College's Center for Retirement Research, told the AP. "For some middle-income people, it will mean canceling the RV." For those with fewer resources, it means spending their golden years in poverty, she said.Across the U.S., governments large and small at the state and local level have discovered they can't afford the pension promises made to teachers, emergency workers, and other government employees. Public pension debt is $4.4 trillion according to a report issued by Senate Republicans -- $3 trillion for states and municipalities.And if you want a sense in miniature of what that crisis could look like for the U.S., turn to Detroit, which is debating cuts to the pensions to former workers, which accounts for $3.5 billion of $18 billion in debts that forced the city into bankruptcy. Here in Frederick County, the picture is rosier, but still not great. According to December's State of the County report, other post-employment benefits are funded at 32 percent. That's compared to 2 percent for the state.Defined-contribution plans, such as 401(k)s, that put the responsibility for retirement planning on the shoulders of private employees, are being raided to pay bills.If you have an eye on life after work, we'd urge you to read the AP's article, which contains deeply迷你倉出租troubling facts specific to the U.S. You can find it online at bigstory.ap.org/article/ap-impact-world-braces-retirement-crisis.The story cites, for example, that:n People are living longer. An Organization for Economic Cooperation and Development study found that the average man in 30 countries would live 19 years after retirement, an increase from 13 years in 1958. The average age of retirement now, 63, will have to be 66 or 67 to make pension systems affordable.n The birth rate has declined, and as people are living longer, this means more seniors with fewer younger people paying taxes into the system. Thus, less money to sustain the pension system. According to the AP, the 65-and-older population will rise from 20 to 35 percent in the U.S.n Americans are at least $6.8 trillion short of what they should have saved for a comfortable retirement, according to the National Institute on Retirement Security, or, for people aged 55 to 64, $113,000 per household. American's pre-recession borrowing led to a 75 percent increase in household debt from 2003 until mid-2008, or an additional $5.4 trillion. That borrowing occurred at the cost of setting aside money for retirement.n For those who have set aside money to supplement government pension plans like Social Security, interest rates are dramatically lower after banks cut rates following the financial crisis. Anxious investors reluctant to take chances have away from the stock market.While the gradual economic recovery in housing prices and the stock market will help, it's inadequate. Fifty percent of American households will still be unable to maintain their standard of living, according to Boston College's Center for Retirement Research.The U.S. encourages, but doesn't force companies to require opt-out retirement plans, rather than asking workers to opt-in, according to the AP. But tackling this coming financial apocalypse may take something as radical as making it mandatory for employers to contribute a set percentage rate from each pay check toward a retirement plan, as in Australia, which prohibits any withdrawals from those accounts until retirement.It may be too late to offset the worst of the impact, but perhaps, if lawmakers can be convinced to set aside their differences and act soon, the affects might be blunted.Copyright: ___ (c)2014 The Frederick News-Post (Frederick, Md.) Visit The Frederick News-Post (Frederick, Md.) at .fredericknewspost.com Distributed by MCT Information Services迷你倉