The nest-egg myth (Susan Jacoby, LA Times Op-Ed)

[pinto]

Really good, meaty opinion piece ~ pinto

The nest-egg myth

Nearly half of today's older Americans receive no income from assets such as stocks and savings accounts.

By Susan Jacoby
February 20, 2011

As the debate over the federal deficit heats up, Americans are going to hear a great deal about "greedy geezers" who are supposedly bankrupting the nation with Social Security and Medicare. Politicians will no doubt be more circumspect than former Wyoming Sen. Alan Simpson, who, as the Republican co-chairman of the federal deficit commission, described Social Security as a "milk cow with 310 million tits."

The myth underlying these attacks (including Simpson's misogynist bovine metaphor) is that most old people don't need their entitlements — that they are affluent pickpockets fleecing younger Americans.

This image of prosperous geezers and crones is just not accurate. The notion of an aging population well prepared to take care of itself — not only in its relatively healthy 60s and 70s, classified by sociologists as the "young old," but throughout the "old old" 80s and 90s — is a delusion that threatens to undo 75 years of social progress that began when President Franklin D. Roosevelt signed the Social Security Act in 1935.

No generation stands to lose more from this fantasy than baby boomers, whose oldest members turn 65 this year. Because of financial losses in what will surely be known to history as the Crash of 2008, many boomers — especially older ones with less time to recover — may enter retirement in a worse financial position than their parents. According to a report by the Center for Economic and Policy Research, a liberal Washington think tank, households headed by boomers between the ages of 55 and 65 lost about half of their wealth between 2004 and 2009 as a result of the real estate collapse and the shrinkage of 401(k) retirement accounts. Americans at the lower end of the socioeconomic scale were the hardest hit, because for most lower- and middle-income families, their homes were their only assets.

http://www.latimes.com/news/opinion/la-oe-jacoby-aging-boomers-20110220,0,6111013.story

Susan Jacoby is the author of "Never Say Die: The Myth and Marketing of the New Old Age."
Copyright © 2011, Los Angeles Times

[eridani]

1. Gen X and Gen Y are going to be even worse off

The Greatest Generation could cound on defined benefits pensions. Boomers faced the first assault on them, but many of us still squeaked by and have one. Social Security may well be all that younger people will ever have. Wages have seriously declined in real value over the last 30 years, and younger folks will also find it harder to save.

[Tuesday Afternoon]

2. bkmrkng. thanks.

K&R

[jtuck004]

3. "Three-fourths of those over 65...have annual incomes...of less than $34,000."

From the article...

"Three-fourths of those over 65, according to a report by the nonpartisan Congressional Research Service, have annual incomes, including Social Security, of less than $34,000. Furthermore, household income drops precipitously with every decade, and most of the poor in their 80s and 90s are women, who — unless their husbands possessed vast wealth — are very likely to become poorer when they are widowed."

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People turning 65 slightly over 200 a day, about 3/4 million/yr.

About 1/3 to 1/2 retire with nothing but SSI. Say they get 1200/mo, (avg per SSI is 1177) less than $15K/yr. Works ok as long as you have someone friendly to live with, not much fun on your own.

Maybe many people living in multi-person, say 8 to a home, in our future? Rebuild some of the repossessed homes into multi-bedroom shared-kitchen places. Communes? Pool their money and buy script drugs in bulk from Canada? Groupon for a CT-scan?

[BobTheSubgenius]

4. I would LOVE to have a retirement income of $34,000.

Mind you, I'm single and have no debt.....so that's something in my favour.

[Name removed]

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