|An estimated 78 million baby boomers will begin turning 65 in 2011, creating further pressure on the already over-burdened Social Security system. Two years ago, the federal government estimated that by 2017 Social Security would be paying out in benefits more than it was taking in. Four years ago the estimate had been 2019. It is now expected that more money will be paid out this year than the System will collect.|
The scale is much larger than publicly perceived:
|In an April 27th survey, Putnam Investments of Boston revealed that 40 percent fewer Americans expect to fully fund their IRAs this year than last year, and that “62 percent (believe) their savings are unlikely to provide them with a sizeable retirement nest egg”. With total retirement assets in the U.S. at about $18 trillion, that works out to around $175,000 per worker—nowhere near what will be required... Two years ago, Roger Lowenstein suggested in his book While America Ages that total cumulative retirement deficits are approaching one trillion dollars. A recent study by the Stanford Institute for Economic Policy Research would indicate that Lowenstein's number is too low. The Stanford study reviewed the unfunded liability for California ’s three largest pension funds—CalPERS, CalSTRS and the University of California ’s Retirement System—and determined that those three funds alone were underfunded by more than $500 billion|
Our economic shift from consumption to savings is not just a response to a biting recession, but a generational turning point, where suddenly we cannot afford our own retirement, and the deficit is so great that the fix can be nothing less than a dramatic and lasting change to how we live our lives.