What is the Baby Boomer retirement crisis you ask? well its like this. There are 10,000 Baby Boomers retiring every single day, and this is just the start of things to come. All these people have reached retirement age of 65 and will now be joining the ranks of folks on Social Security. At the present time this alone does not make for the Baby Boomers Crisis, but other factors contribute to the crisis that is not reversible.
Lets face the facts; the Baby Boomer generation is doomed and not prepared enough to retire. They didnt do this all by themselves. It all started with the free spirited, free love, of growing up in the 60s where going to a party every night, drinking Boons Farm Strawberry Hill smoking a little grass, sleeping with whatever you wanted. This was the common thing in Colleges across the country. Not just College students but just about every kid over 17 got involved with this crazy movement. The big slogans back than was make love, not war.
Speaking of war, at that very time our country was engaged the war against Communism. We were sending our young men and women off to a war in Vietnam where we were defending the South Vietnamese against the North Vietnamese Communists and the Rebel forces of the Vietcong who were everywhere. In this war we learned how to fight an enemy we couldnt see. The war was not very popular back home in the States.
By the end of the war in 1975 unemployment was high 7.7%; the prices for everything were rising. Oil was at its all time high, wages were going up to keep up with inflation. The Government wasnt doing enough to create more jobs. If you were lucky enough to have a job you had better keep it because not many good jobs were out there.
Many Baby Boomers were settling in and making families, but buying a house was almost out of the question. The entrust rates were the highest they had been in years, although the home prices were not yet going up, they stayed the same. So many Boomers chose to rent rather than buy, in doing so they could hopefully save up to buy the American dream.
The 80s were not so good for jobs either, it wasnt until the late 1980s that jobs started to show up. Companies were hiring again, the wages were good too, and many of the Corporations that were looking for good help used the company paid pension as a lure to attract good workers. The Baby Boomers were finely getting something put away for retirement. They had a good job with good benefits that would bring a sense of security to a young family.
Things were going pretty well for the Baby Boomers for the next 17 years. The housing market was going up and interest rates were stable. It was a great time to invest in real estate. Smart investors saw the opportunity invest in their future by buying rental property. It was a sound investment and the residual income would be great when retiring. Some Boomers started a 401K or an IRA, each requiring monthly contributions that were set aside for retirement. These accounts were held by brokerage firms who invested your funds in the stock market.
Then came October 27, 1997, where the stock market crashed leaving investors wondering which way to turn. By the end of trading that October day, the Dow Jones Industrial Averages sudden downward plunge dropped 554.26 points. This was the third biggest point loss in history. This sudden drop left Baby Boomers with the realization that these 401Ks and IRAs were not worth what they were the day before. Many found that their accounts value had diminished by 50 % or more.
Down, but not out, the Baby Boomers got up, dusted off their pants and started over. At least most everyone still had jobs and the income was steady. By the end of 2001 our economy was starting to drop. Suddenly the jobs that were very present had all but despaired. Slowly big companies begin to lay off its work force which led to a worsened economy.
As the layoffs continued all across America, most of the big companies had already discontinued their contributions into the retirement plans they had set up for their workers. This trend of stopping pension contributions spread to almost every company that was not represented by a labor union.
Just when you think it cant get any worse, on comes the depression of 2008. Unemployment was creeping toward 9% and it seemed like just over night the bottom fell out of the housing market. Home prices were devaluated and almost everyone felt the sudden drop in home prices. Anyone who had purchased home in the last 10 years had lost 50% of the home value. This meant hundreds of thousands of home loans were upside down. The prices for food, gas, electricity, and most everything were going up. People were filing for unemployment by the thousands. The economy was in a bad way, with no solution to fix it in sight, the Baby Boomers were down again, only this time it was to late for them to fix what had happened.
Now with only 2 more years to go before the first of the Baby Boomers start to retire the Government will be hard pressed to fulfill its promises to the Baby Boomers. It wont be long before the largest retirement crisis happens. State and City Government are operating in the red, using the money set aside for pensions to make ends meet in the budgets. Already large cities are filling for bankruptcy. Ill bet you that the owed pensions funds will be the very last to receive any money.
Now the biggest generation ever is about to retire. Remember what I said at the beginning of this article: There are 10,000 Baby Boomers retiring every single day.The country is broke and unable to pay their debts. The Baby Boomers are broke unable to pay their debts. What next? I dont know.
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