Friday, March 27, 2015 11:56pm
North Adams, MA now: 34 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
SIGN IN | REGISTER NOW   

Home About Archives RSS Feed
The Independent Investor: Why Baby Boomers Are Grumpy
By: Bill Schmick On: 01:30PM / Friday January 28, 2011
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0

You would think those born between 1946 and 1965 would have a lot to be thankful for. After all, the first wave of those baby boomers is finally eligible to retire in 2011. The recession appears to be over and jobs are beginning to make a comeback, even the stock market is performing well — so what's the problem?

The Pew Research Center's recent survey on baby boomers indicates that fully 80 percent are "dissatisfied with the way things are going in the country today."

Quite a bit of that unhappiness can be traced to personal finances and negative economic views. That makes sense since boomers were hit harder than most segments of the population by the double whammy of declining stock prices and housing prices. For those laid off who are older than 50 years of age, it has been harder to obtain a new job. And even those who are employed argue that real income has stagnated over the last decade. As a result, the majority say their household finances have worsened and a higher portion of boomers than other ages have had to cut spending this year.

The current estimate of baby boomers in America is 79 million, about 26 percent of the total U.S. population. Although they still consider retirement age at 65, the typical boomer believes that old age doesn't begin until age 72, according to the survey.

Times have changed since the boomers came of age in the '60s and '70s. Back then, America was the land of honey and horizons seemed to stretch forever. Now, most boomers point to the huge national debt, the deficit, a lack of political leadership and lament that America is past its prime. They and their country are in decline, or so the story goes.

"My parents worked hard, saved, retired and enjoyed their golden years," said one disgruntled boomer, (who gave me the idea for this column).

"Why can't I do the same?"

Actually, there are a number of reasons why this time around it is different and most of the fault lies with us Boomers. Back in the day, our parents were part of a pension plan that included monthly retirement savings on the company's tab. My Dad was a machinist at SKF (a ball-bearing manufacturer) for 30 years and worked another full-time job at night. The pension contributions increased as his salary rose and as the number of years worked at the company increased. His pension was conservatively managed by trained professionals. It was also fairly easy to calculate the money he would be receiving on the first day of retirement and my parents planned for that.

Their mortgage was fixed and ended right around the time of retirement. Your parents also knew how and what their medical plan would be in retirement as well as Social Security benefits. Most costs were controlled, or at least somewhat contained while families lived frugally and spurned debt. Some did so successfully and enjoyed those golden years, others (like my Dad who died of a massive heart attack a few years after retiring) didn't do so well, but at least the results were fairly predictable.

We baby boomers wanted more.

We did away with pensions and took control of our own retirement in the form of deferred-retirement plans like 401(k)s and IRAs. The problem was that contributing to those plans was voluntary (unlike pension plans). And somehow there was always something more important to spend our money on. Besides it was much more fun to "flip houses and make a killing" than make those monthly contributions toward retirement.

Even those who did save only kinda sorta did it. Self-directed, deferred-retirement plans should have done exceptionally well in the period from 1982 to 2000. It was the greatest bull market in recorded history, but few actually put enough money in these plans to make a difference. By 2001, when some of us actually began saving more, we watched those savings first disappear during the Dot-Com bust and then again more recently in 2008-2009. As a result, retirement plans actually went nowhere in the last decade.

As if that wasn't a low enough blow, those of us who counted on our houses to bail us out — the "I can always sell my house" crowd — witnessed that store of wealth decline 30 percent in the last two years. Houses are not moving, or if they are, sellers are forced to take a cut depending upon the size and location of your home. For someone forced to sell, faced with the prospect of living on social security with insufficient retirement savings, there is definitely something askew with the American Dream. It is no wonder that Boomers are grumbling. Many feel their country’s economic prowess has peaked and the promise of prosperity for all has been broken. Living the dream for many has turned into living a nightmare.

Maybe it was that old long-haired hippie in us that whispered we would live forever so why worry about retirement, or if we really had to, we could get by living in our old VW bus. It is only now that those romanticized notions are disappearing in the face of reality. But it is not too late. Maybe you can't retire at 65 but that may turn out to be a good thing. You can always start saving, and if I am right about the stock market this year, even first-time investors could make a substantial return on their money.

This country still holds promise for those willing to grasp it. No one is ever too old for that.

Bill Schmick is an independent investor with Berkshire Money Management. (See "About" for more information.) None of the information presented in any of these articles is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or e-mail him at wschmick@fairpoint.net. Visit www.afewdollarsmore.com for more of Bill's insights.



4 Comments
Tags: baby boomers, pensions, retirement      
News Headlines
Finance Committee, Selectmen See ACRSD Proposed Budget
Former Pittsfield Councilor Pete White Seeking at-Large Seat
Williams College Admits 1,159 Students for Class of 2019
Cheshire Water Protection Bylaws Saved; Bridge Being Closed
Lenox Library Launches 20th Annual Book Donation Drive
Scholarship Deadline Approaching for Girls Inc. Awards
Applications Accepted for Lola Greene Legacy Scholarships
BFAIR Annual Meeting to Feature Self-Advocate With Down Syndrome
Williamstown Election Lines Fill Up
Adams Focuses On New Economic Development Strategies

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (164)
Independent Investor (221)
Archives:
March 2015 (6)
March 2014 (2)
February 2015 (7)
January 2015 (9)
December 2014 (7)
November 2014 (4)
October 2014 (9)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
May 2014 (9)
April 2014 (8)
Tags:
Recession Japan Crisis Stock Market Energy Taxes Europe Selloff Markets Deficit Banks Federal Reserve Stocks Jobs Commodities Metals Currency Debt Ceiling Interest Rates Economy Bailout Europe Greece Fed Oil Euro Rally Election Retirement Housing Fiscal Cliff Congress Pullback Debt Stimulus
Popular Entries:
The Independent Investor: Don't Fight the Fed
The Independent Investor: Understanding the Foreclosure Scandal
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: Will the Municipal Bond Massacre Continue?
The Independent Investor: How Will Wall Street II Play on Main Street?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
@theMarket: The Fed Does It Again
The Independent Investor: Financial Challenges Facing Single Parents
@theMarket: Pay Attention to Diverging Markets
The Independent Investor: Kids & Money
@theMarket: Home on the Range
The Independent Investor: Rise of the Smoothie
@The Market: Full Steam Ahead
The Independent Investor: New Fiduciary Rule Would Benefit All of Us
The Independent Investor: How to Make the Most Out of Social Security
@theMarket: A Race to the Bottom


View All
Spark Event @ Sohn Gallery
Sohn Fine Art in Lenox hosts a Berkshire Creative Spark...
Hoosac Valley Does 'Grease'
The Hoosac Valley High School drama team is producing the...
North Adams Chamber @River...
The North Adams Chamber of Commerce held its monthly mixer...
Birds of Prey
Julie Anne Collier of
Berkshire Chamber Nite @ UP
The Berkshire Chamber of Commerce held its monthly...
Pitt House Series at Dottie's
The first in the Pitt House Concert Series was a sold out...
Berkshire Awards 2015
Lila Berle, Churchill Cotton and Mary Rentz were honored on...
BYP Networking at AIER
The Berkshire Young Professionals gathered at the American...
Berkshire Art Fellowship Show
The 12 Berkshire Art Association College Fellows for 2015...
Hoosac Boys Lose to Old...
The Bulldogs scored the next six points and later used a...
Hoosac Girls Drop State Final...
The Hoosac Valley girls basketball team ended its season...
Massachusetts Region I High...
Near 80 students from throughout the region met in the...
Mt. Greylock SEE Fund
Williamstown's community access television station,...
2OT, Sends Hoosac to State...
Jameson Coughlan scored on a baseline inbounds play from...
HV Win State Semi-Final
Last season, with 1 min., 30 sec. to go Bellingham was down...
Hoosac Girls to Western Mass...
On Saturday afternoon, it had a chance to hang one more...
Spark Event @ Sohn Gallery
Sohn Fine Art in Lenox hosts a Berkshire Creative Spark...
Hoosac Valley Does 'Grease'
The Hoosac Valley High School drama team is producing the...
North Adams Chamber @River...
The North Adams Chamber of Commerce held its monthly mixer...
Birds of Prey
Julie Anne Collier of
Berkshire Chamber Nite @ UP
The Berkshire Chamber of Commerce held its monthly...
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings
Advertise | Recommend This Page | Help Contact Us | Privacy Policy| User Agreement
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2000 Boxcar Media LLC - All rights reserved