Fading Retirement Prospects Explain Why We’re So Glum

By DAVID GROVES

A new statewide Elway Poll finds that more of us are worried about the future than ever, or at least since he began asking that question 20 years ago.

"What troubles me right now is I'm pushing 50 years old, and the market is pretty dead," Ron Ross told the Seattle Times. "I'm nervous for my future and my retirement because I don't think Social Security is going to be around. And I'm just watching my 401(k) do nothing except get smaller."

That neatly sums up the anxieties being faced by all Americans.

This summer, dramatic market fluctuations have become the norm as stocks plummet on the latest crisis in Europe or worries about whether Congress will pay America’s bills. The Dow Jones Industrial Average dropped more than 500 points in a day three different times in August. So far, the market has mostly rebounded from these rapid declines, but we all remember the Great Recession’s October 2008 crash when the Dow lost nearly 20% of its value in one week.

These wild market gyrations cause more than just heartburn, they wreak havoc on Americans’ hopes and dreams for the future.

With the decline of defined-benefit pension plans and the shift to 401(k)-style savings plans invested in company stock or mutual funds, many Americans have become part of the “investor class” George W. Bush envisioned. In the process, we have lost our retirement security.

Down markets postpone or ruin retirement plans. They wreak havoc for existing retirees whose fixed incomes depend on modest earnings from their lifetime of savings. And they harm job prospects for our youngest workers, as stock fluctuations create waves in the labor market as older workers are suddenly unable to leave the workforce and create vacancies for the next generation.

A recent special report in the San Jose Mercury News concluded: “Many older workers are responding to the economic downturn by postponing retirement, but even so, it will be a struggle to make up for market losses in their retirement plans. Some were counting on their houses as a post-work financial cushion, but now their homes are worth less. They can't depend on dividends and interest on savings -- that income has nearly vanished. They also face layoffs and difficulties getting rehired.”

Glum yet?

As if all this wasn’t bad enough, certain politicians in Washington, D.C., insist on actively undermining public faith and confidence in Social Security and Medicare, the pillars of American retirement security, and are proposing to cut their benefits rather than take the modest steps necessary to preserve and enhance both programs.

It’s no wonder this generation has never been so gloomy. If we can find work, we face the prospect of working until we die.

Our gloom is the result of decades of economic policies that put profits before people, and will take decades to correct. But let’s start by fighting to protect, preserve and strengthen our Social Security and Medicare safety nets.