Thursday, November 17, 2011

Working Until You Drop

A sobering survey from our friends at Wells Fargo:

The concept of a “retirement age” is going the way of the typewriter..

• A quarter (25%) of middle class Americans say they will “need to work until at least age 80” to live comfortably in retirement

• Three-fourths (74%) of middle class Americans expect to work in their retirement years, including 39% of all respondents who will need to work to make ends meet or maintain their lifestyles, while 35% say they will work because they want to, rather than out of financial need.

• Among middle class Americans age 40 to 59, 54% say they will “need to work,” compared to 34% of those age 25 to 39. Accordingly, only 25% of those between the ages of 40 and 59 say they will work in retirement because they “want to,” versus 45% of Americans between the ages of 25 and 39. ...

This new reality isn't hard to believe, especially after you dive into a new Stanford Study on our shrinking Middle Class.

... In 2007, the last year captured by the data, 44 percent of families lived in neighborhoods the study defined as middle-income, down from 65 percent of families in 1970. At the same time, a third of American families lived in areas of either affluence or poverty, up from just 15 percent of families in 1970. ...

None of this should be a surprise to anyone paying attention. We live in a different universe than we did four decades ago.

Then, we had a large manufacturing base, robustly funded schools, a more progressive tax code. America was still the dominant manufacturer in the world, with the rest of the globe straining to catch up. We were the dominant, post-World War power because we were large, untouched by the war, and had a vibrant manufacturing base with a huge advantage because our competitors had been bombed to rubble.

Now, other countries have not only caught us, some are close to lapping us. Not pretty.

I'm not one of those who think we're necessarily doomed to heartache and failure. Sixty years on, the big advantages are gone, so we'll need to shore up our sagging educational system and play to our strengths. (High productivity and workplace flexibility high among them.) Nationally, we need to make smart choices as we chug into the future.

And the lessons to be learned in the here and now? Nothing that happens to us on an individual level can be separated from the larger, economic context. If we don't have a high-level education, we tend to be screwed. If we don't work in an industry with decent wages and benefits, we have fewer decent, day-to-day life choices. (Nice house, nice neighborhood, top-flight schools for the kids.)

And if we don't live below our means and save for retirement, we will likely have a less than optimum life-style during the final decades of our lives, and end up working until the Reaper waves us home.


Anonymous said...

More importantly, was MPIHPP structured to handle expenses for members from 65-85?

No, not any more than social security was meant to keep a person solvent during the later years. Kept from starving to death, yes. But paying the bills of old age?...I think not...

Save accordingly. (which means about a cool million if inflation keeps up and healthcare continues to stay ridiculously out of reach.)

Steven Kaplan said...

Nice lead-in to this point we'll be emailing about today:

The Healthcare Benefits Townhall meetings were held this week. If you had interest to attend and couldn't, you can watch videos recorded of the discussion that was held in September. Links can be found on IATSE's website at:

Want to learn about MPIPHP's costs and how the Health and Pensions are funded? Want to know what the challenges the fund faces in the next contract cycle? Watch and be enlightened.

Anonymous said...

Thanks for the great link. Yes, we do have great benefits.

Matt needs to eat less meat and more vegetables.

Walt's Brain said...

Yes, many will either have to or want to work past the traditional 65 year point. But good luck staying actively employed in the animation biz. Animators can expect less and less opportunity for work as they approach 50, and by the time you are sixty+ you are considered redundant even if you are a superb animator.

On the other hand, I sure hope that I'm out of this wacky CGI business by 65!

Anonymous said...

On average, you will have difficulty reaching the 450 hour minimum after 55. As with investments, success in meeting your retirement goals depends on your last five to ten years - your most vulnerable years. If you do not or can not perform during those last ten, you will fall short of your final goals by 30%, even up to half. That goes for every investment scheme ever created.

That is why '08 was pretty much the nail in the coffin for most boomers. They will most likely work or attempt to work until they are well into their late 70's. This trend will accelerate with increasing downward pressure on every subsequent generation that enters retirement from here after, unless there is a very large shift in the economy to reverse this. Aging boomers will continue to drain the economy until there is enough energy and pressure from newer generations and/or immigration to offset the burden of the aged. That is a fact.

Anonymous said...

It's like the boomers said: never trust anyone over 30 -- oops, I mean 70.

Anonymous said...

The IATSE videos explain precisely why younger workers have a larger burden placed on them than older workers ever had placed on them. Add the national debt on top of it all, and you have the makings of far reaching discontent rising in upcoming generations. One could easily argue that today's youth and veterans have far more to protest against than the boomers ever did. Grandpa is more expensive than he ever was historically.

Site Meter