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"Rose-colored glasses blind boomers to realities of planning". Dr. David J. Demko, Editor-in-Chief AgeVenture News Service www.demko.com 
Think you've done a lousy job of planning for retirement? Well, here's more bad news. The U.S. government is even less prepared for the explosive Baby Boomer retirement crisis. The December 2004 issue of NewsMax (see: www.newsmax.com) should required reading for all Baby Boomers. But, before you begin reading about how our retirement sky is falling, sit down first and have a paper bag ready in case you start to hyper ventilate.
The sobbering truth is ... you, the government, and the rest of the Free World have done virtually nothing to prepare for the tidal wave of boomer retirement. Well, on second thought, the government has done something ... they've been worrying ... worrying alot ... and you should, too.
Why aren't boomers better prepared for retirement? Boomers grew up in a time of great prosperity, but it was a prosperity not of their own making. It was a prosperity created on the backs of America's greatest generation, those now retired. Boomers were pampered by their self-sacrificing parents who wanted their kids to have a better life. Every bed time story began with "once upon at time". Good always triumped over evil. Every adventure had a happy ending. As a result, the boomers see the world through rose-colored glasses. Boomers remain steadfastly optimistic about having enough money to fund a comfortable retirement. But their expectations are unrealistic. The fact is today's pre-retirees under-estimate how much of a nest egg they'll need for a secure retirement. Worse yet, they appear to have no clear cut strategy on how to proceed in establishing their retirement nest egg. These troubling trends are documented in a national Retirement Confidence Survey, co-sponsored by the TIAA-CREF Institute. TIAA-CREF is a non-profit organization serving the financial planning needs of America's educators. According to the 2004 survey, 24 percent of pre-retirees are "very confident" about the adequacy of retirement savings. Forty-four percent report being "somewhat confident" they will have adequate retirement savings. The irony of this "rose-colored" optimism is the fact that only 58 percent report they're currently saving for retirement. This is the same proportion of planning reported by pre-retirees in a 2001 survey. Nearly half of all workers (45 percent) and a third of those age 55 and older (29 percent) say they have total household assets, excluding the value of their home, below $25,000. Just try living on a meager nest egg like that. Most workers plan to keep working longer than today's retirees did. However, nearly four in 10 current retirees had also expected to retire later than they eventually did. According to the 2004 survey, 40 percent of workers expect to live comfortably in retirement on less than 70 percent of their current annual income. In reality, financial experts recommend at least 80 percent, plus additional savings to serve as a hedge against inflation. Twenty-eight percent of those surveyed, assume that up to 85 percent of their income will be enough. But more than half of retirees say their current lifestyles demand at least 95 percent of their pre-retirement income, and sometimes more. Sounds like a big mess is about to hit the proverbial plans when these future retirees realize the error of their nest egg estimates, and their lack of retirement planning. In summary, the greatest challenge facing future retirees is the failure to plan. Boomers aren't planning. Governments aren't planning. Whole societies around the globe face economic crisis when the boomers retire. Like the NewsMax cover story, this is a crisis for President Bush. But, every American will be affected. So, it's really a crisis for all of us. Hopefully, some day soon, citizens and government will take their heads out of the sand, bit the bullet, and make the hard choices necessary to solve this crisis. It won't be easy or popular, but it will be necessary. Get ready for some belt-tightening and sacrifice by both government AND pre-retirees. See related articles in the AgeVenture archives. AgeVenture Lifestyle Features AgeVenture Headline News
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