Dying in the Harness

The Employee Benefit Research Institute released a sobering report on the state of personal retirement.  According to EBRI, the lowest 25 percent of income earners among baby boomer households would need to work into their mid 80s before 90 percent of them would have an even 50 percent chance of having retirement income to meet basic expenditures.  Higher income earners will do slightly better.  But the bottom line is:  Work until you're 84 and you may be able to retire.   However, this report is  an more optimistic than EBRI's 2003 report.  It factors in the incentives provided by participation in employer-sponsored auto-enrollment 401(k) plans. 

But is working until we die (dying in the harness, so to speak) an inevitable fact of life?  Maybe not.  While retirement readiness studies are helpful in promoting the importance  of planning for the future, they may not paint the whole picture.  The EBRI analysis thoroughly covers expenses that will occur in the life of a retiree:  food, clothing, housing, transportation and entertainment, as well as out-of-pocket health expenditures.  These are based on reported expenses from the Bureau of Labor Statistics Consumer Expenditure Survey,

which reports what percentage of income households spend on various products and


Without having examined the entire survey, however, I would venture to ask:  What is considered basic expenses to today's consumer?  Consider today's trends compared to  decades ago:

  • A growing number of seniors are entering retirement with mortgage debt.
  • Purchases that were once considered out of reach for many, such as cell phones, computers, the latest appliances and electronics (flat screen TVs, stainless steel refrigerators that do everything but shop, exercise equipment, media rooms in houses), have become more of the norm.
  • Families are having children later, thus, as parents approach retirement age, they may be saddled with their childrens' college expenses, or worse yet, college graduated children that are unemployed and living at home.

This is not to say that tough times are all a result of our wants and desires for more, but perhaps it's time to focus less on the income side of the equation and focus more on the expense side.  The only expenses I read about in the news are health care expenditures, how they will engulf the household and the economy, and that somebody needs to do something about them.   And parents bemoan that their children will have a lower standard of living than they did.  But isn't it time that we admitted we have much higher expectations than our parents did?  Maybe that is why the goal of retirement seems too difficult to reach.


Comments (2)

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  1. Joe Barnett says:

    Skimming the survey, it looks like three important aspects of the standard of living in retirement are: Can an individual (or couple) meet his basic needs? Or, do they wish to maintain their preretirement standard of living? And, do they wish (need) to leave any estate?

    That last might be where GenXers will find they’ve been shafted. Whereas babyboomers have inherited lots from the previous, Depression Era generations, they’re leaving IOUs rather than assets for the next oned!

  2. wsly says:

    It’s ashame you don’t pursue the ILLEGAL IMMIGRATION issue with the same fervor you vent against Americans contributing to the perpetuation of our quality of life.
    L. A. County Supervisor Michael Antonovich released a statement a couple of years ago informing Californians that ILLEGAL IMMIGRANTS were costing the County of Los Angeles $35 Million each month in Welfare & Food Stamps. This cost DOES NOT include Medical, Schools, Housing, Crime, Incarceration and much more; nor does it include the strain and the drain these millions of criminal interlopers place on our precious natural resources; nor is there any accounting for the amount of pollution they add to our air and our waterways. REMEMBER!!! This is JUST Los Angeles County in California. Multiply this impact across the United States and ILLEGAL IMMIGRATION is costing U. S. Taxpayers hundreds of billions of dollars each year; and typically, an ILLEGAL is paid in cash under the table and ILLEGALS send the larger share of this cash back to their homelands where it’s worth a whole lot more (or at least it was); so these billions of dollars never have taxes paid on them, AND these billions of dollars do not cycle into our system/s reinvigorating our economy; nor do these billions of dollars go toward the construction and repair of our infrastructure. YOU KNOW ! Those old roads, bridges, schools, parks, beaches, libraries, etc. etc. etc. that ILLEGALS use too ! So while you stupid Americans continue to point your fingers at each other; the ILLEGAL Criminal IMMIGRANTS you are ignoring are raping and pillaging your country and screwing your dog or cat. What a bunch of dumb asses.