Saving for Retirement: Take Two

About those initiatives to encourage Americans to save for retirement (see below)? There are those around the country who would say, Phooey. Or possibly something stronger.

Born in the 1930s, ’40s and ’50s, these are people who did everything right: they saved a respectable percentage of all earnings, invested cautiously in companies that seemed to be socially and fiscally responsible, some of which were supposed to be subject to regulation, and switched funds to other choices when those companies acted badly. They paid off their mortgages and credit cards on time (credit card companies never liked them) and lived within budgets. Most of these folks raised their own children on the time-honored formula that said when you have a dollar you give ten cents to your church or synagogue, ten cents to charity, put ten cents into U.S. Savings Bonds, etc, etc, and only with the last five cents would you buy an ice cream cone.

These citizens have now watched their IRAs fade to nothing and their investments income disappear. Want an example? That $10,000 carefully saved for a cash cushion in case of an emergency and invested in a money market fund or savings account once could be counted on to grow, or to pay for a weekend trip. Now, thanks to the Fed’s target rate for fed funds it might earn $25 in a year. The citizens do not notice any hardship, meanwhile, being visited upon the CEOs of those investment fund companies, or anybody at Goldman Sachs.

Beyond saying Phooey a lot, these citizens are worried. The same people who got them in the mess Mr. Obama inherited now seem to be running the economic show in Washington. The citizens want universal healthcare, but can’t help wondering if they’re going to be sunk, themselves, by a catastrophe for which they no longer have funds. The citizens can’t exactly re-enter the workplace.

In short, the prospect of golden years ahead for others is not ameliorating the tarnish of their own.