Americans haven’t been saving enough money, and now the US has entered a retirement crisis the likes of which it has not seen for decades. The WSJ has some shocking statistics from a study by the Employee Benefit Research Institute:
Fifty-seven percent of U.S. workers surveyed reported less than $25,000 in total household savings and investments excluding their homes…. Only 49% reported having so little money saved in 2008.
The survey also found that 28% of Americans have no confidence they will have enough money to retire comfortably—the highest level in the study’s 23-year history.
In addition, the study found that only half the people surveyed were confident they could find $2,000 to pay for an emergency or sudden need. Overall, the number of workers who have saved dropped from 75 percent in 2009 to 66 percent today.
These numbers are truly sobering, but our sympathy for retiring boomers only goes so far. Boomers have been allergic to fiscal discipline, not only in their own lives, but also in the way they’ve configured our nation’s public finances. Instead of saving, they spent. And when they couldn’t spend anymore, they tried to rig the political system in their favor, ramping up entitlement spending at the expense of the young.
Now they are reaping the fruits of their profligacy. Pension programs across the country are going broke, as we’ve covered time and time again. Rising life expectancies could add as much as $97 billion to the tab according to the WSJ.
So boomers can rely on neither their own anemic savings nor on public pension plans to get them out of the hole they’ve dug for themselves.
But Via Meadia values mercy as well as justice, so we hasten to point out that there’s still some hope for those entering retirement age. Retirement expenses are much cheaper in other countries like Panama and Ecuador. And retiring abroad lets you live a much more lavish life on a tighter budget, and the kids only have to fly an hour or two past Florida to visit and chide you for the profligacy of your youth.
Overseas retirement would not only enrich retirees’ lives but also help to bring down entitlement spending in America, especially on Medicare. Currently, Medicare does not cover most routine medical expenses outside the United States, meaning that expat retirees have to buy their own insurance. However, changing Medicare to allow reimbursement at a lower rates (reflecting lower health care costs abroad) would both enable more Boomers to go where the living is easy and reduce the staggering cost of Mediare to the working generations back in the US. In this case, the interests of the Boomers and the national interest happen to coincide. See: the Boomers can still do something helpful for the nation’s fiscal outlook.
They can leave.
[Image of Mexican Beach from Shutterstock]