Pre-boomers Face a Series of Financial Hurdles — Is There a Solution?
Remember the late1970s with double-digit unemployment, double-digit interest rates and double-digit inflation? We pre-boomers do, and it’s about to happen again. Back then, we were in the prime of life and the future belonged to us. Now, we’re on fixed incomes or depending on retirement savings that, not too long ago, dropped like a brick. Unlike in the ‘70s, we don’t have the time or the opportunity to make back the money we worked so hard to save for retirement.
Pre-boomers may not be directly affected by unemployment or even high interest rates. But with inflation poised to raise its ugly head, even though retail prices are deflated right now, there’s reason for long-term concern. Manufacturers have seen the cost of goods on the world market continue to climb, and these increases will be passed on to us – that equates to less bang for our bucks in the future.
With inflation introduced into the mix of increases in taxes and fees by federal, state and local governments, many pre-boomers are faced with the prospect of drastically altering their lifestyles so they don’t have too much life left at the end of their money. This problem is compounded by what’s happening in the housing market. Foreclosures nationwide may reach 2.5 million by the end of this year, and the value of single family homes is down by 30 percent. Recovery remains a problem, because inventories are high and demand is low. This means pre-boomers won’t receive as much money from the sale of their homes, even if they are lucky enough to find buyers.
Our savings portfolios are off by more than a third, home values are down almost as much, and now double-digit inflation looms on the horizon. What else can possibly go wrong? Look at the situation closer to home. In California, we got hit with an increase in the state sales tax. I live in Los Angeles were water and power limits have been lifted, so water and energy costs are likely to rise markedly, and the US congress has passed the cap and trade bill which could further increase everyone’s energy costs. Have you looked at what’s happening in your state and local community? It may surprise you.
There’s the uncertainty surrounding health care reform, the proposed cuts in Medicare spending, plus the possibility of a national sales tax in the form of a European-style value added tax (VAT). So financial security for pre-boomers could become a nightmare rather than the fulfillment of the dream we worked and planned for all our lives.
We can bemoan this unfortunate turn of events, or get active and let our city, state and congressional representatives know about our concerns and ask how they are going to vote on issues that are important to us. Then get together with other like-minded citizens and support candidates who support pre-boomer causes. We have the votes to change things, but nothing will happen unless someone gets excited. That someone is you.
Discussion Area - Leave a Comment