THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, February 19, 1995 TAG: 9502170034
SECTION: COMMENTARY PAGE: J4 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 53 lines
The year 1973, many economists agree, was a year that will live in infamy. The unprecedented and unbroken rise of the American middle class, dating from the end of World War II, was reversed. Owing to numerous factors - public policies detrimental to the middle class, rising taxes and fees, increasing global competition, the change from industrial to service jobs - middle-class buying power began to drop. The decline was masked for years because spouses went to work, but it continued, and it continues. Not for nothing is the middle class hacked off.
Now early retirement is becoming ever more difficult.
Under the headline ``A disappearing dream,'' a recent business-section story said the average retirement age is around 58 but future retirement ages will be much higher. By the year 2025, said Paul Westbrook, who runs Westbrook Financial Advisers in Watchung, N.J., only half of all people ages 60 to 65 will be able to retire, compared with 95 percent now. By 2050, only 5 percent can reach that goal.
By the time aging baby boomers seek to retire, Westbrook and other experts say, fewer companies will offer buyouts, and many will have eliminated traditional pension plans altogether. To keep Social Security and Medicare from bankruptcy, Congress is considering raising the qualifying age for both.
Working longer might be good for us. ``The `work ethic' holds that labor is good in itself, that a man or woman becomes a better person by virtue of the act of working.'' So spoke hard-working Richard M. Nixon on Labor Day 1971, three years before taking early retirement.
The Southern novelist and tippler William Faulkner wrote, ``You can't eat for eight hours a day nor drink for eight hours a day nor make love for eight hours a day - all you can do for eight hours is work. Which is the reason why man makes himself and everybody else so miserable and unhappy.''
One thing's clear: People seeking to retire early should begin saving young and save till their teeth hurt. Retirement, the article said, requires 60 percent to 80 percent of pre-retirement income.
The article suggested scaling back lifestyles to save for retirement. It said, ``You might buy a smaller house, forgo extravagant vacations or send your kids to public colleges instead of Ivy League schools.'' Of course millions of middle-class residents already live in small houses and don't even dream of extravagant vacations; Virginians wonder how they'll afford public university tuitions, among the highest in the nation.
The modern message appears to be, ``You'd better save, because you're going to have to take care of yourself.''
In other words, we're going to have to act like grown-ups. by CNB