Age-old issue 

Bracing for the reality of retiring Baby Boomers

It would be easy to do an "end of year" roundup and take a look back at the trials and tribulations of 2010. But in truth, the challenge lies not behind us, but ahead of us. Beginning in January, 10,000 Baby Boomers a day will turn 65—a pattern that will continue uninterrupted for the next 19 years. The implications of 73 million Boomers retiring are enormous, and 2011 will be the year America must confront the fiscal realities facing our nation.

It's tough to even imagine 10,000 people a day hitting retirement age in the U.S., but perhaps putting it in scale to Montana will help. At that rate, the entire population of the city of Missoula would be hitting 65 in a week. In just a short 10 days, it would amount to more than the population of the entire Missoula urban area according to the 2009 census estimates. It would take a mere 100 days, barely more than three months, before it surpassed Montana's population.

As noted in articles throughout the media this week, if everything was as it should be, the aging of a large and active generation wouldn't be reason for concern. Facing 9.8 percent unemployment going into the New Year, it would seem a good thing that the moldy oldies were stepping aside and opening up new job opportunities for the younger generations. Having paid into the so-called "safety nets" of Social Security, Medicare and Medicaid for all their working lives, the retirees should be looking forward to enjoying their "Golden Years" with the considerable equity of their paid-for homes, guaranteed high-level medical care and regular checks arriving in the mail from pensions, retirement funds and the federal government.

But sadly, that's simply not the case in our country right now. In fact, it's not even remotely in the ballpark for the future facing not only the Boomers, but also those who will follow them.

The grim reality goes something like this: First, the nation is broke—not just broke, but horribly in debt, with 40 cents of every dollar now spent by Congress being borrowed money, mostly from the Chinese. The Social Security system that Boomers were told would be there for them in their old age is, likewise, in deep financial distress. Sure, the federal government collected a portion of every working man and woman's pay from their first day on the job through their entire working lives. But unfortunately, Congress couldn't keep its spending proclivities under control and squandered what should have been an enormous interest-bearing trust fund, substituting real dollars with IOUs held by the Treasury...which does not have the funds to pay off those IOUs.

The so-called "solutions" being offered to attempt to keep Social Security solvent into the future are neither pretty nor fair. Younger generations will find themselves watching 65 go by and they'll still have years to go before their life-long contributions to Social Security might be available to them. Plus, if some have their way, they'll be forced to pay even more of their earnings into a fund that may or may not be there in their old age.

Many of the aging Boomers have likewise paid into pension funds for all their working lives, expecting to receive the guaranteed benefits when they quit working. But there, too, reality is considerably different than the carrot held out to the Boomers for all the years they spent in the harness. In 1980, as recently reported by The Associated Press, 39 percent of private-sector workers had pensions that guaranteed payments in retirement. Today, less than half—15 percent—even have the option for pensions.

Yet, even for those with public pensions, such as Montana's Teacher Retirement System or the Public Employees Retirement System, the future is not assured. Although the Montana Constitution guarantees that public pensions cannot be cut, a significant structural imbalance exists thanks to the tremendous losses incurred during the stock crashes of recent years and the on-going recession. Given the average loss of 20 percent of their value, both systems face unfunded liabilities of nearly a billion and half dollars each, which means they will not be able to meet the required payouts in the next three decades.

Although Gov. Schweitzer likes to brag about "Montana being one of only two states in the black," with nearly $3 billion in unfunded liabilities for the state pension systems alone, we are far, far from "in the black." Nor is there much light at the end of that particular tunnel, since the "solutions" being offered are, like those the feds are offering for Social Security, neither pretty nor fair.

As most Montanans—and especially those who own homes and pay property taxes—know the cost of local governments likewise keeps going up and up. The question, in simplest terms, is who will be able to pay those costs when 10,000 Boomers a day are hitting retirement age and going from revenue producers to revenue consumers? So far, this little slice of the reality pie is just beginning to get the attention it deserves but, in truth, the ever-increasing expenditures by federal, state and local governments have come to an end.

The American Dream of home ownership, a productive and rewarding working life, and medical and social security guaranteed in old age is now revealed as a sham, a myth designed to keep the workers in the harness while the accumulation of wealth flows unceasingly to the upper 2 percent of the population.

Reality is that the days of the American Empire are likewise over. We have a clear choice—we can either take care of our citizens and domestic obligations, or we can continue our enormously expensive attempts at military domination of the globe. But we can't do both. It would be prudent for our politicians to face that fact and start dealing with us honestly and openly because the realities of 2011 are not going away.

Helena's George Ochenski rattles the cage of the political establishment as a political analyst for the Independent. Contact Ochenski at

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