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Will rich-as-Croesus coots be our undoing?

 Is 80 really the new 30? Only in the realm of fantasy, says the author.
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Date published: 5/19/2011


--As the debate over the federal deficit heats up, Americans are hearing a great deal about "greedy geezers" who are supposedly bankrupting the nation with Social Security and Medicare--though politicians will no doubt be more circumspect than former Wyoming Sen. Alan Simpson. As the Republican co-chairman of the federal deficit commission, Simpson described Social Security as a "milk cow with 310 million tits."

The myth underlying these attacks (including Simpson's misogynist bovine metaphor) is that most old people don't need their entitlements--that they are affluent pickpockets fleecing younger Americans.

This image of prosperous geezers and crones is just not accurate. The notion of an aging population well prepared to take care of itself--not only in its relatively healthy 60s and 70s, classified by sociologists as the "young old," but throughout the "old old" 80s and 90s--is a delusion that threatens to undo 75 years of social progress that began when President Franklin D. Roosevelt signed the Social Security Act in 1935.

No generation stands to lose more from this fantasy than baby boomers, whose oldest members turn 65 this year. Because of financial losses in what will surely be known to history as the Crash of 2008, many boomers--especially older ones with less time to recover--may enter retirement in a worse financial position than their parents.

According to a report by the Center for Economic and Policy Research, a liberal Washington think tank, households headed by boomers between the ages of 55 and 65 lost about half of their wealth between 2004 and 2009 due to the real-estate collapse and the shrinkage of 401(k) retirement accounts. Americans at the lower end of the socioeconomic scale were the hardest hit, because for most lower- and middle-income families, their homes were their only assets.

Further, only half of working Americans--the wealthier half with employers that match contributions--even have tax-sheltered retirement accounts. The average value of these accounts, by the way, was only about $45,500 before the crash--hardly a lavish retirement nest egg for boomers expected to live beyond 85 in unprecedented numbers. In just 20 years, the over-85 population is expected to number more than 8.5 million.


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