Future of Retirement
By Alane Cunningham – Contemporary Retirement
As I tried to decide whether to bake cookies or read a book this afternoon, it occurred to me that I may be experiencing something future generations may not be able to do – retirement.
Reading the paper and watching the news, it becomes increasingly clear that things are changing for the generations after us baby boomers. And it makes me wonder how I would feel coming out of college now, starting a career, instead of finishing one. I believe the Baby Boomer generation that is retiring now will be the last to have the so-called entitlement programs. With the current budget deficit, it becomes clear that something has to give. And depending on who has the political power it will be determined what areas of the budget are cut. I guess we are the last to enjoy increasing prosperity and early retirements?
Some states are mandating that State and Local government employees begin contributing to their retirement funds like most of those working for the private sector do. In fact, defined benefit programs, guaranteeing an income for life are likely to end with our generation giving way to 401 plans that are controlled by the individual employee with no guarantees by the employer. While I don’t necessarily think that is a bad idea, I am not sure how people are going to fund their retirements themselves or at least those in lower wage positions. Average wages when adjusted for inflation have been going down for many of us during the last two decades and this trend is unlikely to change soon. Even most college graduates are unlikely to find things easy going in the future and those without degrees are likely to find only minimum wage work and no prospects for any retirement.
The economic recovery is currently underway but unemployment is still at 8.8%. Employers may be hiring more, but they are hiring disproportionately in retail and service sector positions. These jobs have low wages and few, if any, benefits. According to the Associated Press, high paying fields such as real estate and finance accounted for 40 percent of the 8.8 million jobs lost from January 2008 to February 2010 but only 14 percent of the jobs created in the year that followed.
Lower-paying industries such as retail constituted 23 percent of the jobs lost but almost half of the recent growth. Obviously, with this kind of job market it is difficult to find a high paying job, or one that affords the ability to contribute large amounts to retirement accounts.
So, how must the future seem to someone who is just starting out? Some advocate telling our youth that they are going to have to be content with less. That they can’t have the same things that previous generations had. But I don’t buy that. I think every young generation looks to the future with hope and that’s the way it should be.
If you are fortunate enough to have retired the one thing we can do to help those just starting out is to stop complaining. Many of us have the privilege of a good life during retirement with adequate income and excellent health care. Many of our grandparents did not have these privileges and I fear many of those generations following us may not either. Wow, were we lucky!
About Alane Cunningham
Alane is a graduate of Eastern Michigan University. She retired from the University of Michigan after 27 years. She currently lives in Florida in a small beachside community with her husband. She navigates retirement with human nature observations realizing everyone must find their own way to happiness through this passage of life.