Retirement Epidemic: Poison Now or Later?

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We live in an instant gratification society. The house, the car, and annual vacation take precedence over contributions to retirement and savings accounts. It therefore comes as no surprise to me that Americans spend more time planning for vacation than they do on planning for retirement.

Given the choice of spending or saving, Americans in large part choose “spend now, save later.” In other words, Americans choose to drink $10 margaritas now (spend) and swallow the more expensive poison (save) later. Spending now and saving later sounds good in theory until you reach your mid-60s and realize you’re going to have to work as a Wal-Mart Stores greeter into your 80s while eating cat food in your tent.

To make matters worse, you don’t have to be a genius to see that irresponsible government spending and globalization have compromised the health of our country’s entitlements (Social Security and Medicare). Benefits are likely to be reduced over time and age eligibility requirements are likely to increase. If you fold in the dynamic of exploding healthcare costs and broad-based inflationary pressures, one can quickly realize savings habits need to change.

The traditional model of working for 40 years and then relying on a pension and Social Security payments to cover a blissful multi-decade retirement just doesn’t apply to current reality. On top of the disappearance of plump pensions, life expectancy is rising (around 80 years in the United States), so the realistic risk of outliving your savings has a larger probability of occurring.

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