Standards of Life in the Future: Think Grim

ap ^ | Monday, March 6, 2006 | by Ben Stein

[Flavius]

I've had a couple of bad experiences recently that sharpened my worry about what life will be like for retirees in the future -- I fear that a catastrophe of declining standards of life is heading our way.

I'm thinking about how bad it has gotten in terms of how customers are treated. A few days ago, I called the saleswoman at an auto dealer who sold me my last car a few years ago. I asked her to come over and show me the newest model of my car and told her if I liked it, I would buy it on the spot.

"Sorry," she said. "Too busy."

"Really? Are you selling that many Cadillacs?"

"Well, I'm not really selling any, but a lot of people are looking and wasting my time," she said.

"But you know I'm a qualified buyer who has bought from you before," I protested.

"Maybe I'll fax you some stats," she said helpfully. I never got them.

How Much Worse for the Masses?

Today, I was supposed to have a nice comfy seat on United Airlines. Full-fare first class. When I got to the gate, the agent said my seat had been changed to one up against the bulkhead, and there was no way she could move me. No apology, not even looking me in the eyes.

On the plane, no flight attendant would help until an older one, from the days when United actually had some self-respect, asked a young man to change with me. He did, and I was happy. But meanwhile, the flight attendant who did help me told me I was the only full-fare first-class passenger in the cabin, and still no one had wanted to help me until she came along.

My point is how terrible service is -- even at the higher end in 2006 -- and then to add this chilling thought: If this is how bad it is at the high end now, can you imagine how awful it'll be for everyone in 2020? When all vestiges of service are gone? When no one speaks English? When all customers are just ciphers?

Look at it this way: Think of the most crowded freeway you're on every day. Imagine what it'll be like in 10 years. That's what hospitals will be like -- if they're not that way right now.

Retiree Vulnerability

To make the situation worse, retirees and those who will soon retire are far from financial safety (see "Living Hand to Mouth -- and Barely Getting By"). I recently calculated that the Baby Boomers need to have saved -- on average -- $400,000 per household to even start to come up with what they need to live on. Instead, they have saved about $50,000 per household if they have a rental home and about $110,000 if they own their home.

So, what will they do when they retire? What will it be like to cut pills in half, to have to sell your home and move into a trailer, to be faced with unaffordable repairs for your car?

Try this experiment: Imagine you have to slash your spending by half. What goes first? Restaurant meals -- fine. Vacations -- fine. New clothes -- fine. But that won't even come close to cutting spending in half for most people.

The sad fact is that retirees will suffer. And for the leading edge of the Boomers is: It's too late. Many of them cannot escape a drastic ratcheting down in income and lifestyle. A crisis akin to the Great Depression is racing our way: A ruinous drop in standards of life.

Shoring Up Your Retirement Savings

What will it be like to live in the horrible new dog-eat-dog world, with no one caring whether you live or die -- and have no money? What will it be like on that crowded freeway? You don't want to find out.

How do we get to high ground? I suggest -- unless you're already on track to have 15 times what you need to live on at retirement socked away by age 65 -- taking 20 percent of your paycheck if you possibly can, putting it in the Fidelity Fund (FFIDX) or the Vanguard Total Stock Market Index Fund (VTSMX) until you're 55, then putting half of it into the Fidelity Total Bond Fund (FTBFX) or Vanguard Total Bond Market Index Fund (VBMFX).

Maybe if you have a few bucks extra, buy the iShares MSCI Emerging Markets Index ETF (EEM) or the iShares Russell 2000 Value Index ETF (IWN) for developing market or small-cap exposure. But for heaven's sake, do it now.

When you get to 65, put half of it into a fixed or variable annuity -- chosen so you know what every dime in expenses goes for and without buying anything you don't need or understand -- and then know you won't totally run out of money ever (see "A Retirement Portfolio With Staying Power"). Or do something else with a reputable financial planner.

But be very scared -- and start doing something about it now. Tomorrow is too late. Do it now.

[HateBill]

Whoops! Ignore everything I wrote about service if you are dealing with a call center in India.

[dhuffman@awod.com]

Bump to the top. The US is dying of the MSM's high expectations. I'm living on a small annuity, 6 acres of rock, a VW, my bicycles, a 20 y.o. sailboat...life is good

[JAKraig]

I will have paid in to Social Security when I was working and then pay Social Security taxes on the dividends when I am not.
You don't pay SS taxes on dividends.

Not yet you mean!

[mr_hammer]

but, but, but, but I thought free trade and globalization were to lift our standards of living? How can this be?

What about pensions, didn't the Boomer's get the good jobs with pension plans? All the money that was paid into Social Security, where is it at?

Sarcasm off!

and GW43 is advocating further off shoring of quality jobs in favor of this so-called service economy?

Where the hell is the "SERVICE" IN THE SERVICE ECONOMY?

[mr_hammer]

"am perfectly happy growing my own vegetables, and seeing the sun rise each day."

Wish there were more like you! Thank you for your service to this country.

Truly great American's live an "average" life and really plan for the future. Those who live for the moment create hazards for us all.

[qam1]

Xer Ping

Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations (i.e. The Baby Boomers) are doing that Gen-X and Y will end up paying for.

Freep mail me to be added or dropped. See my home page for details and previous articles.

[mr_hammer]

sums up my feelings exactly!

[weegee]

Look at a website like ebay and you'll be happy to get a phone menu. They don't even give out phone numbers. Email goes through a series of menus to "sort of" define your problem.

And they'll get back to you when they feel like it and not respond to your responses to email. You have to go through their online menu system if there is still a problem.

"Customer service" is a joke. They find dealing with customers to be nothing but a nusiance. Rather than address problems they pretend they don't exist and turn a deaf ear. And that becomes the "new standard".

Our economy is shifting jobs out of production and into services but services are shriking.

[kabar]

True enough. Congress has been changing the rules and moving the goal posts on SS ever since its inception. The cap on the contribution and benefit base has been raised every year. In 2000, the cap was $76,200. In 2006, it is $94,200. The tax rate, combined employee and employer contribution, was only 2% in 1949, 3% in 1960, and 15.3% (12.4% for SS) today.

In 1950, there were 16 workers paying Social Security taxes for every retired person receiving benefits. Today there are 3.3. By 2030, there will be only 2.

Nearly 80% of Americans pay more in Social Security taxes than they do in federal income tax.

48 million Americans receive Social Security benefits, including 33 million retirees, 7 million survivors, and 8 million disabled workers.

[Kenton]

Or do something else with a reputable financial planner.

Roger this. That's what I'm doing, and I'll have over a million bucks by the time I retire in 697 days (but who's counting), plus pension and SS.

Of course, the fact that I've lived a fairly modest lifestyle while working at a good job with a pension and a 401k, and having a wife who did the same, will put me in a lot better position than many of my peers. I guess I should thank God that I never developed the taste for high-end "toys" that many of my friends have.

Most of the "Boomers" I talk to have done no planning; you can tell by the way they seem to fear the subject, and blame it on things beyond their control. I expect that too many people are going to find themselves hurting very badly in their senior years, and increasingly prey to a younger generation that will have no mercy when it comes to reducing what meager benefits that they will have.

So really, FRiends, go out and get a good financial planner and start putting it away now. The money you put away for the future will grow, and you will not miss it if you have it taken out of your pay directly. And the bottom line is, if you don't - well, you were warned, and will have nobody to blame but yourself if your retirement plan includes the phrase "would you like fries with that"...

[sportutegrl]

The bulkhead is the best seat. No one can lean back into your face.

[reluctantwarrior]

The crash happens slowly and insidiously everyday; loss of civility, lack of financial literacy, a growing kleptocracy (I got mine, U R screwed), and the demise of our national will to do bad things to bad people. We fail to lock up rapists and pedophiles because its to expensive, we fail to protect the unborn because we might upset the nihilistic humanists, we half step against our enemies because dolts like Murtha and Kerry sit astride the MSM declared moral high ground. The crash is happening everyday.

[linda_22003]

Exactly. I'm on the same course as you are (sadly, with more than 697 days to retirement!). Take a look at my post #24 for a frightening look at the median family finances. They're not pretty, and they're light years away from the preparation my husband and I have done.

We also have not needed high-end everything; we decided to stay in our house and do some remodeling rather than just "move up" to something fancier. We've never lived up to our income.

You said, "you can tell by the way they seem to fear the subject, and blame it on things beyond their control." I've experienced this in conversation, and I've seen it right here on this thread with people claiming they can't save for retirement because they have to pay into Social Security! Talk about excuses.

[Graybeard58]

Here we have another complainer with those terrible things called expectations.

I like Ben Stein but this article sounds like he had Andy Rooney write it for him. Poor guy, his Cadillac dealer won't come to his house. The sky is falling, the sky is falling!

I did some smart things when I joined the military during the Viet Nam era when everyone else thought I was nuts.

Ditto for me. It was hard to save anything on military pay back then and I didn't save much but did get into the habit. I was only in for 4 years and then joined the civillian rat race.

I retired at age 54 a little over 6 years ago. I do not expect anything ever from social security. I have no expectations from any gov run agency. The only gov agency I am sure will be involved in my life is the IRS.

I grow my own veggies too and spend time with my grand children and even now have a great grand son. (see my about page for a view of that handsome lad). Life is good and Ben Stein needs to get a grip instead of a gripe.

[xrp]

But Ben is right service has gone to hell.

Nah, maybe it is the places he is visiting or maybe it is the city he lives in. Here in Kansas City and Minneapolis (the 2 cities I live in/work in) I have almost always had great, friendly service -- ranging from low-level restaurants ($20 lunch) to high end restaurants ($150 dinner), rental cars, airlines (Midwest and Southwest) and hotels.

In fact, about the only bad customer service I've had recently was last night at Pizza Hut when I had placed an Internet order for a pizza, gone to get it and 10 people were standing around staring at a spatula for 5-6 minutes before asking me if I had been helped.

[kabar]

I expect that too many people are going to find themselves hurting very badly in their senior years, and increasingly prey to a younger generation that will have no mercy when it comes to reducing what meager benefits that they will have.

Actually, it will be the seniors who hold the political power. Besides the fact that they vote in greater numbers than the young, by 2030, there will be 70 million Americans of retirement age--twice as many as today. There has been a significant wealth transfer to the old from the young over the past decades. The gray panthers are a formidable political force now and will become increasingly so in the future. Look for SS taxes to be increased and retirement ages raised on the younger generation to pay for us.

Social Security pays more than $450 billion in benefits each year. If nothing is done, by 2060, the combination of Social Security and Medicare will account for more than 71 percent of the federal budget

[sgtbono2002]

I got a big kick out of the phone message when I called about my phone having a lot of noise in the line.

Problem: The noise on the line stops the dial up from working.

Their answer go online to report it. Now if they can tell me how to report it online when I cant get online for the friggin noise I guess I will have it made.

[sgtbono2002]

I am not a fan of Globalism.

I am a fan of us having Sovereignty. Stories about the UN claiming our parks as Global refuges are mostly crap right now as the UN has no power to enforce their illigitimate claims, but will it stay that way?

I am not for UAE or Dubais or any other foreign power running our ports, but the fact is they already are.

China is running Ports. The company Dubais is buying these ports from was British. How many other foreign countries already have operations in our ports. It appears the Genii is alread out of the bottle and hypocrits like Hillary and her husband are as much at fault as Mr. Bush.

Now she screams rape, after Bubba has already taken money from Dubais. Allowed China into California and Panama. Any FOOL can see she is making a political play. Perhaps it is better if we turn down this deal , but that decision has to be made after looking at it seriously and ignoring Hillary's and other political players con games for power.

[KneelBeforeZod]

the fall of rome has already started.

job that don't absolutely require a college degree and the capacity to do something with it are outsourced, or given to masses of part-time imbeciles.

this is the economy we are building.

[GOP_1900AD]

Poor boomers. Assumed the big union cash cow would go on forever. Spent too much on short term comfort and fancy vacations. Boo freakin' hoo. (I started my 401K when I was 24 years old.)