The majority of people, especially retirees or those near retirement, will be forced to downsize their lifestyle in the coming decade or two, regardless of who wins in November because our problems are so structural that only a dramatic change of the national mindset can correct the downward spiral we are currently in.
Let's not waste our precious time and energy discussing on what or who was at fault as there is more than enough blame to go around. Let us focus indeed on how everyone can in their own way mitigate what is coming down the pipe.
Social Security
The vast majority don't believe that Social Security will ever cut. They think that the government can force rich people to make up the gap in any Social Security reform. There are millions more poor folks than there are rich so I am dubious that they will be able to plug the financing gap in Social Security.
More importantly, the truly wealthy are quite untouchable. Apple, for example, has a massive cash hoard parked overseas due to our high corporate taxes. Many billionaires have their assets geographically diversified and are thus out of easy reach of Uncle Sam. It is the middle class who are left holding the bag !!!
The Coming Decades
At least half late-Boomers are going to retire poor. They have no benefits coming other than a Social Security check. Little savings. Fairly low lifetime earnings so a fairly small Social Security check that many will take too soon.
The average Social Security check for a retired worker is $1,346 or $16K per year and they have $120 per month pulled out for Medicare premiums. The reality is half will need SSI to top up their Social Security check to keep them above the poverty level.
Living Well on Less
Boomers should seriously consider how they will cope if the worst happens and they have to live off substantially reduced benefits.
Food for thought includes : -
Medicare
Medicare is going to be "reformed" because it has to be. Current levels of spending and coverage aren't sustainable. Base coverage will be less.
A cut in benefits need not be actually announced. Inflation, whether acknowledged by the authorities or not will take care of it. It is already happening - rising medical expenses via higher insurance premiums and deductibles etc.
Social Security, Medicare, Medicaid, pensions etc will be cut in the foreseeable future. The greatest cost item for boomers is medical bills so folks should seriously try their utmost to stay as healthy as possible through diet changes, exercise etc now in the hope of postponing need for medical care. Physical education should be promoted as a means of nurturing healthy students.
Strategic Planning
I would like to focus on how best to network with folks who feel that it is prudent to hope for the best but being PREPARED.
Your nucleus network would be your extended family but should widen outwards to include your neighborhood. It is one's mental readiness that counts should the worst happens. It would be great if every family has some place to readily evacuate to should the need arises. Scenario planning is the key without going overboard.
You Don't Need to be Rich to Travel
On a lighter note, a dollar saved is a dollar earned. My husband and I used to travel overseas but have decided it is better to conserve. I am now exploring the idea of doing hospitality home exchanges as a way to dramatically cut vacation costs. We live about an hour southeast of Orlando, about 15 minutes from the Atlantic Beaches.
Would love to hear from anyone who has done hospitality exchanges before. We are particularly interested to connect with folks living around Toronto or the Great Lakes who would like to snowbird down to Florida for a month or so to escape their fridge winter in exchange for hosting us in summer
Can they leverage off their homes by taking on renters?
Can they get together with neighbors to share transport so they don't need to own a car?
What can folks do to build community spirit so as to still enjoy life without having to spend lots of money?
How about starting up neighborhood groups with like-minded folks to host potluck parties in turn?
We will adapt as circumstances demand, whether we like it or not. I believe in the scouts motto of being prepared because to be forewarned is to be forearmed. We will re-discover the value of community as we increasingly realize that we have only ourselves to depend on rather than the authorities, to somehow get through the fiscal and societal storm headed our way in the coming years.