It’s not just the current economic crisis. It’s 10 years of basically 0 returns on the market from 2000 to 2007 (pre-crash). It’s the decade of inflation “out-performing” prevalent interest rates. It’s 25 years of trade deficits and the systemic de-industrialization of the country.

When the pension funds come up short, the US government will be the back-stop. But without real internal economic growth, the pensions will be covered with “printed money” making the existing pensions all the less valuable.

At the end of the day people at 65 will receive a pension. But the average pensioner is quickly going to realize that they are not going to make it to 85 on that pension.

And honestly, my father and I discussed this in 1999 when talk at the time focused on a lack of jobs for new grad.

The math is really obvious, if everyone plans to retire at 65 and live until 85 or 90, you end up with a populace where half the people are working and half are “sponging” (those under 20 and over 65). Given that we have the baby boomer “bump” we’re going to have even more than half of the populace slated for sponging. In an economy that’s already in massive debt! (there a whole blog post here)

So the point remains, the average American is not going to retire at 65. Now is the time to accept that fate and start figuring out how work and survive until 70 or 75. I’m already planning to, so should they.

Admittedly, it doesn’t make sense to come here on your own to explore retirement options–having a network of people you can trust will make the transition a lot easier. So, in 2006, I started a company called “Boomers in Costa Rica.” Our company introduces clients to experienced professionals and to the type of real estate options that are only from reputable sellers. We generally help explore retirement and investment options in Costa Rica. If you are interested in learning more, the website is http://www.boomersincostarica.com.

For the other half of retirees, many of these people had pensions. The shift in recent generations has been to place the responsibility on us [IRA & 401k] rather than the pension system. It is the most recent generations that got the benefit of the US being such a large part of the global economy that they received benefits unsustainable to us.

We boomers were just deluded with the two decade rise in stock & home values. And now we have to deal with what we had hoped to avoid facing. More saving to have a decent retirement. And fixing the system to ensure we leave things decent for our kids – as we had already done to help end the war & get the environment back on track.

Did you mean to say that the fall in asset prices –wouldn’t– have blown a hole in their long-term solvency?