To steal a line from Obama in this "ownership" society where in return for "the chance to strike it rich" (versus a much harder ability to do so in Europe for example) [Feb 18: Economic Woes Reveal a Long-Felt Unease & Denmark is the Happiest Place on Earth?] we rip apart most of the safety nets - you will see over the next 15-25 years the "cost" to the vast majority who won't strike it rich. Many of these people now will have to support both their aging parents along with helping their kids. I read an amazing article in Money magazine this weekend about the massive costs of college - Is College Still Worth the Price? The numbers there startled me, I did not realize just how pricey college has become. You can see from the graph to the right as terrible as healthcare inflation has been, college tuition inflation has gone up by twice the rate. It is a worthwhile read and the amazing thing is American parents and their kids gravitate to colleges with higher prices because "price = quality" so even (ho hum) colleges in some cases increase prices just to attract students. Some examples of colleges increasing price by >20% in 1 year and seeing a flurry of new applications. Backwards isn't it? But that's our mindset.
Since this lifestyle erosion is happening over a very long period of time it won't get the headlines but this is the reality - a generation who will work until they drop - I call it the Walmart greeter generation (but you can throw Lowe's, Home Depot, Kmart, Target and a few others in there) People not in the upper 5-10% are simply being squeezed from every which angle and the long term trends are ominous. People will survive but it will be a drop in lifestyle or as I call it "The Pooring of America"
- Americans are changing the game plan for retirement, with millions laboring right past the traditional retirement age and working into their late 60s and beyond. While the average retirement age remains 63, that standard may soon be going the way of the gold watch -- a trend expected to accelerate as baby boomers close in on retirement without sufficient savings.
- For 64-year-old John Lee, "retirement" bears a strong resemblance to his full-time working career -- full of 40- and 50-hour weeks as an IT technical support specialist. He's not strapped but likes the extra cash and the feeling of being needed. Lee never envisioned putting in long work weeks in his mid-60s.
- But for Melissa Fodor, a retired travel agent who works part-time as a caregiver for the elderly, the extra work "keeps my head above water" and there's no end in sight to that financial need at age 68. Although the work is satisfying, she confides that "financially I'm kind of scared most of the time. Because what should happen if my health and my body fail?" Divorced and with no children, she says she will have to work "forever" to make up for a lack of savings since Social Security doesn't go far enough to make ends meet. Caring for seniors, a job she loves, pays just $9 an hour and dog walking pays less. Squeezed by rising prices and still $20,000 in debt on her condo, she stopped buying meat, beer and pricier vegetables and cheeses this year and is making other cutbacks. "I feel blessed with the good health that I have. But I'm a little bit bitter because I don't think I should be scared financially at 68," she said, adding that she blames only herself for not saving more.
- What disturbs her more than her situation, though, is that of all the men in their 60s, 70s and even 80s she worked with at Lowe's. After losing their jobs as engineers and scientists, they now stock shelves just to survive. But they hide when fellow retirees come in, she said, because they don't want people they knew from their country clubs and higher-income jobs to see them. "That's just not right," she said. "That hurts me to see that. Some of these people are supporting their grandchildren."
- Twenty-nine percent of people in their late 60s were working in 2006, up from 18 percent in 1985, according to the Bureau of Labor Statistics. Nearly 6 million workers last year were 65 or over. (so in just 20 years - about 1 generation - it's gone from 1 in 5 to 1 in 3 working at that age- I believe it will only increase from here - remember we had a great stock market boom from 1982 - 2000 ALONG with much more of the workforce having pensions in the time frame discussed)