Editorial: Retirement increasingly unattainable for workers

A maxim of nest-egg building is “pay yourself first,” meaning before you spend your paycheck on current wants, be sure to set some money aside for future needs. Unfortunately, this adage has been largely ignored in this country and around the world, setting up people for tough times in retirement. That is, if they can afford to stop working.

Lulled into a false sense of security, government, employers and workers figured the rising tide of the post-World War II economic boom would provide leisurely golden years as a matter of course. A couple of generations did enter into comfortable retirements, but longer life spans, economic upheaval and government debt have pulled the plug.

Retirement specialists are studying the circumstances of people approaching the traditional retirement age and report that many of them are tragically unprepared. Pensions have gone by the wayside, replaced by programs that shift the responsibility to workers. But they either don’t have the time to make up the loss of a presumed benefit or they haven’t made the effort. Plus, many who have seized the reins of their future finances have proven to be inept at saving and investing.

As a result, experts are predicting widening poverty among the elderly and an increase in the number of people who can’t afford to retire. Furthermore, the strain on children to help their parents will make it more difficult for them to save for retirement.

Americans are not alone in facing this dilemma. “Most countries are not ready to meet what is sure to be one of the defining challenges of the 21st century,” the Center for Strategic and International Studies in Washington concludes.

Pension benefits in European countries have been slashed by an average of 20 percent as they struggle to reduce government debt. The recent global recession accelerated negative trends that were going to challenge budgets anyway. Longer life spans coupled with lower birth rates make it unlikely that governments can reverse the decline in retirement benefits.

With nowhere to turn, people will have to take it upon themselves to plan their futures. But they’ll have to do a much better job than they’re doing now. As the Associated Press reports, “Americans are at least $6.8 trillion short of what they need to be saving for a comfortable retirement. For those 55 to 64, the shortfall comes to $113,000 per household.”

Even with the recent economic recovery, about half of U.S. households may be unable to maintain their current standard of living in retirement, according to Boston College’s Center for Retirement Research.

Governments are already swimming in debt, so people should not expect a bailout. For millions of people in the baby boom generation, it’s too late. They will have to continue working – either full time or part time – and lower their expectations.

Younger people, however, can still enjoy a comfortable retirement as long as they take full responsibility for financing it. And that starts with paying yourself first.