Boomer retirement shortfall significant

Financial firms can send voluminous amounts of mail and have commercials on every radio and television program every hour, but that is not going to address the retirement challenges ahead for the majority of baby boomers.  Most of that promotion is focused on the minority of boomers whose wealth surely is worth competing for.  Many others face a tougher reality than in the past.  (ok here, fortunate at least on this front, it seems so far)

Why is it different now?  Here are some reasons:

---the majority of boomers do not have defined benefit plans.  Those bulwarks of middle class prosperity were phased out by most private corporations in the early 1990's, and now are mostly confined to the public sector, some areas of which will ultimately have trouble funding them.  Almost everything in the private sector rotated to 401K plans, which are finite and subject to discretionary early draw downs.

---Social Security does not come close to providing a reasonable cost of living in most parts of the country.  The best that can be said is that one possibly could get by on it marginally.  The government inflation factor that increases have been based on does not include food and energy, two things that all older people are sure to need, and seems to underweight health care costs.  It is also not cost of living adjusted by area, so what might be helpful in Danville, VA would be almost useless metropolitan New York.

---For the past seven years and looking forward for perhaps many more, principal safe savings accounts and conservatively managed money market funds have had almost no return, almost zero interest.  That means that those who were prudent savers are hardly benefiting at all from the magic of compound interest, in the past a mainstay of retirement security.

---The parental bailout is for the most part over.  That cushion that protected many boomers through financial ups and downs for many years has by definition dissipated broadly, and certainly if a benefit is there it is also finite.  Other living relatives in general will be focused on their own challenges now.

---The dream of home ownership being the ultimate bailout is not what it once was.  In most areas house prices are below what they were five years ago and are definitely not on any consistent rise.  Options to sell, reap a profit, and move are more challenging due to mobility costs and transaction costs that would often not be offset significantly by the lower gain on sale than had been expected 10 years ago.

---Small businesses traditionally and now are not places with pension funds and robust 401k's.  Their retirement benefit has always been the continuity of the business, from one generation to the next or from one set of employees to the next.  For many reasons, that apple cart has been upset.  The growth of more intrusive Federal, state, and local regulation has not helped.  National chains in restaurants, hardware stores, clothing outlets, groceries, and all manner of other consumer goods have ended that life cycle of small business in many cases.    When that cycle is broken, there is no chair left for someone running around the table, and no value in the business to retire on.

---Retirement home living is generally expensive, of course not covered by Medicare, and run by sketchy companies in many cases, especially when on the surface it is affordable.

 All of that can sound somewhat gloomy, but it is just one more manifestation of the squeeze on the once robust middle class.  Years of prosperity duped many into not only going too far out on a limb in real estate, but also in aspiring to a lifestyle that sapped some of their long term savings.  Car costs that became a visual and visceral imperative were part of being American. College costs have been no small part of this spending phenomenon as well.  The lure of easy money, too easy, before 2008 led to a hangover that still exists for many and the fear ingrained by the recession kept many from investing in equities, or just staying in equities, and recouping their losses.   

Many boomers will be in the workforce as long as they can hang in, earning wages that have now been through the adjustment wringer of the Great Recession.  Maybe for some it will be time for a fortunate bailout by successful children, but broadly speaking that will require a return of a growth economy.

How can some kind of optimistic conclusion be reached here?  What about some humor? Hmm.  It may all come down to the strength of communities, something that can be encouraged by government action but cannot be created by the government.  Communities were where the boom all began years ago. Real cohesive communities provide both material and mental sustenance.  Time to go back?   Time to find a new one?  "Time, Time has come today."