Hint: it won’t be us.

OK, so federal deficits have been coming down fast. But the long term is still fraught. I just read (well, skimmed) The Predictable Surprise, The Unravelling of the U.S. Retirement System. It’s heavy with history, financial analysis, and policy stuff, but the subtitle says it all. Sylvester Schieber points to problems Americans could have fixed – and still might fix – if we weren’t politically paralyzed.

Payroll tax projections not sustainable“The conditions that brought down private pensions were known years before that system started to collapse. The unsustainable nature of state and local pensions has also been clear for some time. . . The  [coming] fiscal crisis in Social Security affects every generation.”

It’s amazingly easy to see what’s coming, Schieber says.

“President Clinton declared that our failure to act [on Social Security] would be ‘horribly wrong and unfair.’ We have now squandered 14 years since his declaration, and the deterioration has continued.”

And this withering of retirement systems comes just as a huge shortfall in families’ savings for retirement is becoming obvious.

It looks like tomorrow’s workers will support their parents and grandparents. If we don’t do something soon, they’ll be

– paying more taxes for Social Security and Medicare,

– giving their elders financial help directly, or

– watching them slide into poverty in retirement.

Maybe all of the above.

If government isn’t going to protect our kids and grandkids from these burdens, perhaps we can do it within our family. Ideas on how in coming posts.