The following is an article detailing some overall saving statistics among baby boomers:

Boomers Going Bust

Notice the median value of retirement accounts from ages fifty-five to sixty-four is one hundred thousand dollars.  Can you recall twenty years ago when grandma passed away and she had the same amount in her savings account?  Also can you remember how many years since then that medical costs went up thirty percent a year?  That spells doom for baby boomers.  At a minimum it spells no retirement.

One major problem that has led to this is our reliance on the stock market for savings.  What many people now understand is that  the stock market is one hundred percent risk.  A one percent interest rate, which is pretty high nowadays, would have been better for savings, than losing forty percent of it in the recent downturn.  Note that the Dow Jones first hit ten thousand in March of 1999, and it sits there today.  Wall Street made a killing off of personal retirement funds, and individuals lost the farm.

The second major problem is Social Security.  This program was designed to supplement the income of the elderly in case of disaster.  It was designed to feed retirees if they had severe financial problems, in other words, a last resort to prevent financial devastation similar to what occurred during the depression.  Fiscal conservatives knew it when Social Security was implemented, and know it still today:  Handing people money changes their behavior.

The baby boomers had the greatest opportunities of anyone in American history for income growth.  Jobs in many sectors of the economy flourished from the 1960s through the 1990s.  There were many years of high interest rates, such as 6.5%, on savings accounts.  But the fact that social security was waiting in the wings for them meant they would never save their money. They learned the bad lesson from their parents that  Social Security, designed as an emergency stipend, could be used as a primary income source.   Yes, a primary income source if one loves to live a life of  near destitution. So we continually hear stories that grandma cannot afford her medication.  Now, mom and dad are never going to retire, never going to get a chance to just sit back and relax, and enjoy the fruits of their lifetime of extremely hard work.  They thought that SS was going to pay all of their bills.  Keep in mind we have not had severe economic conditions until the economic collapse of 2008.    In my mind, Social Security has caused people to live in squalor, even though the conditions of the Great Depression, until now, have never repeated themselves!

The strange thing is that although Social Security has actually caused poverty, the same poverty it was designed to prevent, few people will consider making any significant changes to it.  This is called the public being on the government dole.  Everyone gets a government payment now, so even fairly fiscally conservative people want to make sure they get as much of the payoff as possible.

Far be it for me to criticize without suggestion a solution, which is to offer social security as optional. The politicians can talk all day long about the greatness of this program, but how about freed om of choice?  (Do not tell Nancy Pelosi or President Obama, but “choice” only exists for killing babies in their mind, and real choice should never exist:  The government knows best.)   Let us give a generation of people the choice of Social Security or not Social Security.  After forty years of observation we can empirically compare the lifestyles of those that opted into the program and those that opted out.  Those with the better lifestyle will prove that their decision was correct.

Along with allowing people to opt out of SS, the populace needs a steep education on money.  All Americans must save more.  Our real wages, with the collapse of 2008, have taken a permanent dip.  Unemployment is here to stay, part time jobs are here to stay, the ability to increase ones standard of living is going to be extraordinarily difficult from here on out.  Thus, personal savings are the key.

As part of the Social Security Opt-Out plan, the government shall mandate that the employer contribution be paid to the employee.  I will gladly take a 15% raise, and will no doubt prove that I can do much more with this money than the federal government of the United States.

JBM