Joe Nocera in his column on faith-based retirement provides a chilling reminder of what might lie ahead for many baby boomers.
Caught in the chunk of history that has witnessed the demise of defined benefit retirement plans, this generation may well experience personal economic disaster as they enter their "golden years" woefully unprepared for the non-working days of their lives. The author might be able to write well into his 80s, but others will find themselves jobless and nearly penniless.
Contacts in the insurance industry tell me that at today's rates of return, $100,000 will, if paid as a single premium in an immediate annuity, provide a 65-year-old man with monthly income for life of about $466. The 22 percent of retirees who have accumulated $250,000 can look forward to about $1,166 a month using the same annuity product.
While both these examples look bleak, the darker outcome for these retirees might be foregoing guaranteed income and living on their savings until those savings run dry. The same issues that accompanied their accumulation efforts (lack of investment knowledge, failure to stay the course) are almost guaranteed to negatively affect principal preservation.
We have the makings of a crisis as baby boomers leave the workforce without sufficient resources for the future. At the very least, we need to remind Washington that privatizing any portion of money paid into the Social Security system should not be an option. Giving more money to Wall Street is not the answer.
Hilton Head Island