Monday, December 27, 2010

Did Baby Boomers Trade Retirement For Christmas?

We've heard this refrain before.  Americans approaching their golden years haven't saved for retirement: 

Through a combination of procrastination and bad timing, many baby boomers are facing a personal finance disaster just as they're hoping to retire. Starting in January, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years.

This season's retail results may indicate why this is so.  Shoppers are still very willing to part with their hard-earned money: 

Forget the returns line. People hit the stores after Christmas to buy, indulging the rediscovered retail appetite that may have made 2010's holiday shopping season the biggest ever.

I would love to see a generational breakdown of this year's shopoholics.  Did the Baby Boomers neglect their IRA contributions so they could have a glorious Christmas?  Did the Sixties' hippie kids keep on "living for today" right through tomorrow and the next day?  Did they spend all that they would earn tomorrow so that they could have today?  I know, that last sentence is a reference to an oft-heard line about sacrifice, but in this context it is an apt description of sacrifice through delayed gratification that did not occur at all. 

Entitlement can mean many things.  It can mean an expectation that Social Security and Medicare are fully collateralized insurance plans when they are in fact unfunded liabilities.  It can mean an expectation of ever-expanding material acquisitions with no regard for payment.  If entitlement means all of those things, it ultimately means insolvency. 

Old habits, acquired long ago and repeatedly reinforced, can prove very hard to break.  Unbroken habits will break us all financially.  Merry Christmas. 

Nota bene:  The author is a member of Generation X.