The prolonged recession is making it harder for many workers to set aside money for retirement.
A new survey released Tuesday by the Employee Benefit Research Institute shows the percentage of workers who say they've saved for retirement slid to 69 percent in January, down from 75 percent in 2009.
Perhaps more alarming is the increasing number of workers who say they have little or no retirement savings.
More than a quarter of those surveyed said they have less than $1,000 set aside. That's less than a mortgage payment for many homeowners.
I can think of several factors that contribute to this predicament. Yes, we all know the stock market has hurt the balances of most investors' 401(k)s and IRAs. A larger contributing factor is probably the psychology of the Baby Boomer generation. Their mantra in the 1960s was "live for today" with no thought for tomorrow. Tomorrow has now arrived and former hippies find themselves unprepared. Maybe the money they spent on pot and acid in the early 1970s should have gone into the stock market.
There's another force hurting Americans: their mortgage payments. Check out the hint in the article that $1000 is less than many homeowners' monthly mortgage payment. The so-called dream of homeownership - sold to naive Americans by an army of realtors, homebuilders, and bank loan departments hunting for commissions - has enticed people to buy houses that were larger and more expensive than they could afford. Money they should have saved for retirement instead turned into negative equity on homes destined for foreclosure.
A final contributor to the impoverishment of many soon-to-be-seniors is the boodoggle known as Social Security. The massive unfunded liabilities in that entitelment program are well documented, but the damage it has done and will do to America go far beyond actuarial results. The mere existence of this program for three generations has subtly taught many Americans that they don't have to rely upon themselves for financial security. Instead, they chose to rely on empty promises from a government program that will be insolvent just when they need it most.
I have relied on myself throughout my working life, even at those times when I was a hostage to the whims of incompetent supervisors and derelict employers. I now have enough of a pile to survive indefinitely as long as I don't go into debt or do something stupid. There's a lesson there somewhere. What could that be? Oh, yeah, I know: save and invest as much of your income as possible starting on the first day of your working life.
