LABOR DAY 2004: Baby boomers seek answers to retirement worries
September 6, 2004
Working stiffs have as much reason to worry about their retirement as their job on this Labor Day.
The latest salvo came in August from Alan Greenspan, who announced future retirees should not be promised more than the economy can deliver. It was a plea to Congress and the president to get serious about the coming wave of baby boomer retirements. But Greenspan wrapped it in chilling language that suggested the economy can afford only a fixed amount of Social Security and health care for retirees.
That's a false setup.
The level of Social Security and Medicare that America wants to maintain for its senior citizens remains a budget choice like any other, albeit a big one. It's also a political decision, some might even say a moral one, about care for the aging. Social Security doesn't pretend to offer luxury living, but it keeps many retirees from sinking into poverty. Medicare guarantees they have a chance of surviving -- financially as well as physically -- when illness strikes.
Social Security takes on added significance as some corporate pension plans look increasingly fragile. Although the government backstops pensions when companies fail, it's generally at a reduced level.
Finally, personal options such as 401(k)s and IRAs, which seemed to offer manna from heaven in the 1990s when the stock market was hot, don't have nearly as much star power now.
Against this backdrop, Election Day offers stark choices. President George W. Bush wants to move Social Security toward a private system, based on voluntary contributions, while preserving the benefits of current retirees and older workers closing in on retirement. John Kerry says he'd keep the system largely as is, within the context of restoring overall budget discipline.
Boomers -- and their children, who may end up supporting them one way or the other -- need to keep this issue at the forefront.
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