The short-sighted, tactical nature of America has always felt odd to me. Consider the stock market. Over the past few decades, ‘analysts’ have taken great pride in judging companies by quarterly numbers. Long term vision and corporate strategy really didn’t seem to be a critical component of the analysis, and now we find large U.S. corporations that made their numbers in very recent quarters and were winners on Wall Street need huge bail-out packages to avoid bankruptcy.
Maybe the bigger problem is that individuals don’t think long term either. Much of America is over-leveraged with various mortgage scams (that were always too good to be true) and large credit card debt. As unemployment goes up and the government tries to mandates lower wages for workers of the companies getting bail-outs, I wonder how most of America is going to support retirement. By the way it’s important to remember Social Security will need a bail-out soon.
It’s got to be a perfect storm—across the board declines in investments, precipitous decline of real estate values, increased unemployment, lower wages, possible collapse of pension programs, and a culture focused on immediate gratification with little regard for saving. How will retirees and near retirees deal with financial weakness and ever increasing longevity? Clearly they can’t.
People approaching retirement age will need to continue working, and people in retirement will likely go back to work. In the standard supply & demand model, this would suggest a larger labor force to further drive down wages further reducing ability to save further accelerating the economic decline. Current news reports already feature stories about retirees choosing between food and heat. It probably won’t get better in the short term. Even with the new administration’s focus on infrastructure jobs (rebirth of the WPA?), efforts are still directed as short term jumpstarts to the economy without correcting root cause issues.
Since it’s time the future is given a higher priority, it’s probably time for yet another ‘czar’. Maybe Retirement Czar isn’t broad enough, but someone needs to finally address Social Security. Someone should understand the magnitude of unfunded pension liabilities in the U.S., which will probably make the current bail-out numbers look small. More importantly, the government needs a cabinet level position to consolidate strategy and advocate saving. The Retirement Czar will need to lead a very visible marketing and education program as well as push for innovative legislation, adjustment of the tax code, and creation of new financial products to assist with a direction of long term savings growth and a more guaranteed income for retirement.
Rick Huebner is President & CEO of VISTECH.com, a technology company based in Hartford, CT.
Go to VISTECH.com for information on new and innovative technology solutions for the retirement income market.
