Albert Crenshaw's analysis (also published today in the Burlington Free Press) portrays the complex task for each person to provide for a secure retirement. The best option is for young workers to learn how to take responsibility for their own financial future, obviously with help from employers, finacial experts, the government and educators. That people do not have the motivation, knowledge, confidence or skills to do this is very troubling, but not new.
Given the increasing levels of uncertainty, growing turmoil as industries continually reinvent themselves and frequent job changes, young people will be more secure in their later years if they increase personal financial resources rather than rely on government programs or hope for employer pensions.
The 'golden age' of financial security built on defined benefit employer pensions and government programs is ending. The powerful forces at work in our complex world will continue to accelerate the need for personal accountability.
These forces include:
Terrorism's continuing threat to Western culture, and the American way of life. To defeat this threat...and there is no option... huge financial resources must be diverted from other priorities.
Technology driven globalization, particularly in those industries that employed large numbers of Americans, disrupts traditional lifestyles and priorities. This reduces the historical security of private sector pensions as traditional jobs move elsewhere and those remaining change dramatically.
Lower birth rates in the U.S. resulting in a declining ratio of workers to retirees, reduce the sustainability of our Social Security system as presently funded. Meanwhile, effective and expensive medical technology prolongs life. Both these factors work against today's Social Security and Medicare funding formulas.
Most young people today are not motivated to think 35-40 years ahead. Our 'now' society does not encourage that, nor is it in the natural mindset of twentysomethings.
Government spending cannot keep up with these program needs unless the U.S. economy remains healthy and growing. Terrorism, the threat of climate change, the escalating costs of energy and natural resources all suggest that government or employer provided retirement security will be under increasing pressure. The only realistic alternative must be to take more responsibility early for our own financial well-being in the last third of life.
I think these factors are driving the Bush administration's push for an "Ownership Society."
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