Friday, October 23, 2009

Black Outs? Brown Outs? How ‘Bout Gray Outs?

What do you think your “golden years” will be like if you are not already scooping up the gold dust and reaping the benefits of a life of working hard? Yup, 60 is the new 38 (not even 40!), don’t ya know?! You no longer need to worry if you’re over 70 about age discrimination… hey, they can force you to retire and it’s not discrimination! Isn’t that the new 48? For most Americans, retirement is a long ways away… and they will deal with that at a more appropriate time, much later in life. The problem is that sooner or later, the lucky ones (the ones that survive) will all reach those golden years.

A pile of “golden bears” retired this year to kick in their Social Security payments, because their jobs were phased out and, well, they didn’t actually have luck moving to their next work experience, so they gave up. The result? A 23% increase in Social Security retirement claims over the same time last year; folks are opting in even at age 62, when the benefits are, well, miniscule and much less than they would be at 66 or 70. The October 23rd NY Times: “The median income for those 65 and over was just $18,208 in 2008 — a quarter of them had incomes under $11,139, according to Patrick Purcell, an expert on older workers and pensions with the Congressional Research Service. … The average Social Security recipient age 65 and over receives just $12,437 in annual benefits, he said, and among individuals 65 and older who received income from financial assets, half received less than $1,542 last year.” Bet you can’t wait to retire and live off the fat of that government check, right?

In fact, the ranks of the “over sixty and unemployed” has doubled since 2001, and of America’s 7.1 million over-sixty workforce, a full half a million are unemployed and looking for jobs, a number that is double what existed in 2001 and a rate of elderly unemployment that has not been duplicated since The Great Depression. And if you’re over 60 but not yet 65, there’s no Medicare, and your insurance costs are at their highest possible level.

Think about the little things we seem to have taken for granted: that our 401(k) plan is intact (enter the market crash of 2008), that 30 year mortgage would be paid off even though it really has another decade until full payment because we “traded” up in the real estate boom, that our homes will provide the retirement money even if they are not worth enough to sell and retire on, that our company’s pension plan will be more than enough even if that entity has filed for bankruptcy and the pension insurance covers only a small fraction of planned expectations.... Yeah, for most Americans, these are “too bad” issues, but those old folks should’ve planned better. Some of them thought they had… and they were “young and foolish once.” But old folks, here’s the bad news; things are tough all over, and those youngsters really would prefer not to pay anymore taxes to cover your golden years – you get coal instead… just not enough to heat your home.

For those that have already retired but find their cash flow is a little short, perhaps those 35 years as an account executive can prepare you to be a cashier at McDonalds. Maybe you can help folks match paint at Home Depot. Older and looking for work? You’ll spend 40% on average more time looking than someone below that “60 is the new 38” threshold. And think what will happen to most people on fixed incomes if, as predicted, the dollar begins to inflate to reflect the international devaluation based on our massive borrowings! Their meager monthly payments will buy less and less as time goes on. This “little problem” will accelerate and race through the economy as the average age of Americans creeps increasingly older. What do you really think we should do about their… er… your future… problem?

I’m Peter Dekom, and I approve this message.

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