This 60 minute, 2006 PBS report describes the financial problems of baby boomers. Among the problems the report highlights are:
1. The fast disappearing lifetime pensions.
2. The replacement of employee pensions with employee 401 (k)’s to which employers contribute less than half of what they contributed to employee pensions.
3. The many employees who do not have the money or the expertise to fund and manage stock market portfolios, or even 401 (k)’s, in some cases.
4. The various fees such as the administrative, finders, trustees, transactional, stewardship, and bookkeeping fees that can consume as much as half of the profits that 401 (k) retirement programs generate.
The State of Nebraska did a 40 year study of state sponsored pensions and 401 (k) plans. After the study, the State of Nebraska went back to giving their employees traditional retirement plans.
Thus, unless baby boomers work for employers such as the State of Nebraska, they might have to work until they are no longer able to work. Especially if they work in lower level jobs or have catastrophic medical expenses, these baby boomers will not be able to live their remaining years in a dignified manner.
The lessons learned from this report should be that baby boomers:
1. Cannot expect anytime soon for most employers to offer the pensions and employment stability that their parents enjoyed.
2. Should expect attempts to erode their social security benefits.
3. Need to get out of debt.
4. Need to max out their contributions to their 401 (k)s.
5. Need to carefully pick the 401 (k) plans with the best returns, if they are given their choice.
6. Need to cultivate a healthy lifestyle so that they can minimize the cost of medical care in their old age.
7. Need to be loyal to their own, long term career interests instead of giving blind loyalty to their present employer.
On a collective level, baby boomers would do well to:
1. Choose elected officials who are not supported by and beholding to corporate interests .
2. Choose elected officials who will support programs such as social security.
3. Find ways to discreetly support the employee union movement.
This DVD is well worth the time it takes to watch it, and it should motivate baby boomers to ponder and plan their career and financial futures.