We Can’t Let This Happen

Here is an article from CBS Marketwatch website by Paul Farrell which predicts an intergenerational battle royal over the next 30-40 years, as we baby boomers age and make more and more demands on an increasingly fragile social security system and other government “entitlement” programs. And sadly, I can’t disagree with his logic.

However, this battle is not inevitable. It can be avoided as long as we baby boomers remember that we should be the mature ones and act accordingly. How?

1. We must be willing to engage in honest discussion of program changes, including benefit changes, retirement age changes, eligibility changes, etc. For as long as I can remember, social security has been considered to be “the third rail of American politics.” (i.e. touch it and die) This can not continue.

2. We need to remember that if there is an intergenerational battle, it is our children and grandchildren who will ultimately pay the price for our intransigence. The simple math is that there are currently seven workers for every recipient, and by the time most of us have reached retirement age, there will only be three. Those three simply cannot support us on the same terms that we supported our parents.

3. Disabuse yourself of any illusions that you’ve been paying into a “trust fund,” and that your money has been invested for you, and that you’re “entitled” to your benefit. Your money is gone, paid out in benefits to existing beneficiaries. Get over it. There will still be trillions of benefits available to those who need them. But we have to be reasonable.

One of the primary players in the coming battle will no doubt be the AARP. I have seen some slight movement on their part in the last few years away from their traditional “touch our benefits and we’ll vote you out” posture towards elected officials. I hope this is a trend.

There are some other glimmers of hope in this scenario. For one thing, as I have previously reported (see November 23rd article, "What % of Boomers Intend to Work After Retirement Age?"), an overwhelming number of you intend to keep on working past “retirement age.” So I am convinced that part of the solution will be to make social security more “work friendly.” This could be done in conjunction with increases in the retirement age, which would greatly improve the solvency of the system. Keep in mind that in 1935 when the retirement age was originally set at 65, most people did not live to that age and therefore never collected anything. And those who did reach it had an average life expectancy of another two years. Today the life expectancy of a 65-year-old is another 16 years for men and 19 years for women.

So obviously something, or someone, has to give. And perhaps it’s us. Hopefully as part of an overall fresh “zero based” look at entitlements by a leader or political party with the guts to be honest. I wouldn’t mind, for example, if we stopped paying people not to grow certain crops, stopped providing housing subsidies for people with six figure bank accounts, etc., etc. If any political leadership rose up that would seriously face government waste, I’d gladly throw some of my own “entitlements” into the pot. Because the alternatives, intergenerational warfare with our children, a crippling of the US economy, and extreme devaluation of our dollar, are too grave to contemplate.

Fortunately, after we forego some of our benefits, the Platinum Years Network will be around to help us still “get the best out of the rest of our lives,” even with a little less money. No problem.

Because that other scenario? We can’t let that happen.

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