It’s Time to Alter the Traditional Financial Security Model

People are living longer lives. More years are being spent post work. And the current model of financial security funded by 401ks and social security is cracking.  Three out of five boomers, according to a recent report from Transamerica Center for Retirement Studies, are forced to retire due to “layoffs, organizational changes, health concerns and family responsibilities.” Only one in six can retire early, with a secure financial net to carry them through their golden years.  The 2008 “Great Recession” hit the boomers hard as many found their retirement savings severely reduced, were laid off, or could not find increasing salaries above inflation adjustments to fund their lifestyles.

 

Boomers are not alone.  The Generation Xers, born between the mid-1960s and the early 1980s, are concerned about their financial security. According to the Transamerica 17th annual Retirement Survey, only 12% of Xers are confident they will be able to retire comfortably, 30% have taken a loan or an early withdrawal from their retirement accounts an 86% are concerned that social security will not be there for them when they retire. Their median retirement savings is: $69,000.

 

It is time for a change to the financial model we have in place.

 

I think it is odd that people can work and then find themselves without enough money in their sunset years, after they provided great benefit to companies they worked for. I find it egregious that companies skating on the thin line of ethical standards, can jeopardize the financial security of their employees, while the founders or CEOs raid the company to line their own pockets. I think it is not right that so many retirees do not have a secure financial base at a time of life when they are more prone to disease, increasing costs, and shrinking opportunities. Dementia and Cancer are potentially major financial requirements that can reduce a couple’s assets to almost nothing. I think it is terrible that very capable workers are unable to find jobs due to efficiencies of businesses and now find themselves falling further and further behind financially. These stresses do not help people live productive lives.  

 

It is time for a change.

 

Some countries are looking at alternatives. Canada and Finland and Switzerland, for instance, are looking at a base universal income. Switzerland is talking about a guaranteed income of 30,000 Swiss francs for its citizens. Here in the U.S., Alaska has been paying its residents a dividend since the 1980s. This dividend is based on the oil revenue it produces.

 

What are you experiencing in your community as it examines its own economic security? Let me know. I would love to hear what you experience.

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