A few years ago, baby boomers needed 3-D glasses to take in the gorgeous vision of their decades to come. Books and articles foresaw baby boomers skipping off into a "Second Adolescence" of self-fulfillment. No longer chained to the 9-to-5 and still healthy, the newly "retired" would follow their muse. The future was theirs, despite all that gray hair (or gray roots).
Certain economic realities have since intervened, forcing boomers to hang onto their old jobs with all 20 fingers. House prices collapsed, taking away their home-equity bag of gold. Their IRAs and 401(k)s may be moth-eaten by bad investment decisions, such as selling stocks after the crash and not holding on for the recovery. Meanwhile, their "safe" savings vehicles deliver about zero interest. And Medicare and Social Security are in deep trouble, or so we've been told.
But let's linger a bit on the golden dream. In her 2004 book, "My Time: Making the Most of the Rest of Your Life," Abigail Trafford writes about fit 50-plus Americans turning "the bonus decades into a personal renaissance." They could "give back" to their communities, spend time with grandchildren, nurture intellectual interests, start a new career and get married again -- or at least shack up.
Sadly, hopes of reinventing one's aging self as a filmmaker or landscape architect have been put on hold for all but the reasonably rich. The good news is that, contrary to rumors, the government-run benefits will survive, if in a less cushy form.
First off, Social Security is just fine. The money in the program's trust fund will keep promised benefits flowing for about 28 years. Those who argue that the trust fund is empty are just trying to con American workers out of the benefits they earned through the payroll tax -- a tax that was hiked 25 years ago specifically to cover the boomers' retirement.
The trust fund was invested in Treasury securities. They can't be defaulted without approval by Congress. Now name me one member of Congress who would vote to stiff the workers.
Medicare is another matter. As of Jan. 1, the oldest baby boomers started turning 65, the eligibility age for this government health insurance plan. The rising costs of Medicare will accelerate as the huge boomer generation partakes of the benefits.
Medicare is not a self-funding program, like Social Security. General revenues, mainly income taxes, pay for 39 percent of it. That makes Medicare, to use tea party language, a redistributionist scheme and form of socialized medicine.
The economics of Medicare and politics of taxation should concern would-be retirees. A recent Associated Press/Washington Post poll showed that only 20 percent of those born between 1946 and 1964 think their Medicare will be secure. (On the plus side, the same poll has American adults of all ages saying they would sacrifice to preserve Medicare benefits.)
How do you stop the program from bankrupting America? First off, wring the enormous waste out of its care-delivery system. Next, raise taxes. Next, ask beneficiaries to pay more for their medical services.
The junior generations will help pay for these benefits, if only to encourage frightened boomers to remove their big rear ends from the jobs that younger people want. (More positions will free up as the new health care law helps workers who want to start businesses, but are afraid of losing their company medical coverage, go forth.)
Concerning the rest of the financial picture -- the real estate, the savings, the investments -- would-be retirees are on their own. A second adolescence? At least the sex will be free.