Congratulations to us! We made it through 2007 and here we are in 2008! Many of us are trying not to panic about the myriad problems carried over from last year: the war in Iraq and Afghanistan; war against terrorism, national security, military threats posed by Iran and North Korea, economic concerns about China, the fall of the dollar, the loss of American prestige around the world, our national debt, recession, and global warming. But, to start the new year, let’s put those trivial issues aside and concentrate on something personally important. Saving for retirement, for example, is something at which most Americans are conspicuous failures.
While per capita annual income in our country ranks among the highest in the world, we continue to avoid the personal obligation to plan for the future by making the sacrifice to put money away for retirement. No wonder that we have a financial problem at the national level. We refuse to take control of our own future. More than 50% of all employees in the U.S. have less than $25,000 in total savings and investments (including retirement assets but excluding their homes). And about 40% of those age 55 and older have less than $100,000 in retirement savings.
Consider this. People are living longer. Many of today’s newborns are expected to reach the century mark. It is now not unreasonable to assume that a couple aged 65 at retirement could live to age 90. That’s 25 years. How much money will they need to live comfortably? Who really knows? Define comfort. But let’s focus on a basic need. Food. Eating. If we allow that they would eat three meals a day at a very modest cost of only $5 per meal per person, they would need $273,750! Do the math. $15 per day times two people is $30 for one day times 365 days in a year times 25 is $273,750. More than a quarter of a million dollars! And that’s in today’s dollars, not counting inflation.
We Americans have a well-deserved reputation for being conspicuous consumers. We are too caught up in self-indulgence and immediate gratification. Ultimately, a price will be paid. As George Carlin admonishes us:
“The paradox of our time in history is that we spend more, but have less, we buy more, but enjoy less. We have bigger houses and smaller families, more conveniences, but less time. We have more degrees but less sense, more knowledge, but less judgment, more experts, yet more problems, more medicine, but less wellness. We have multiplied our possessions, but reduced our values.
We've learned how to make a living, but not a life.”
We need to resolve to enjoy that good life by preparing for retirement. Following through on a resolution to fund that retirement account would be a great start to 2008 ..and beyond!
Slainte!