GOLD FOR THE GOLDEN YEARS
Your article "The economics of aging" (Cover Story, Sept. 12) discusses many positive factors about our financial future. The authors place great hope in the growing savings rate and the extended working life of baby boomers. They fail to consider, however, the effect of downsizing, rightsizing, and outsourcing on this group.
A downsized baby boomer will have reduced ability to "pour billions of dollars into retirement savings plans and mutual funds" and will have great difficulty finding a job that will replace lost income or that will last until the new, delayed retirement date.
This situation will create a new class of educated, though poor, workers--who will be more dependent than ever on Social Security. To compound the problem, their reduced incomes will not be available to fund Social Security.
John M. Blocher
Missing from your relatively well-written article are the effects of the budget, trade deficits, and a declining currency on the future economy. Most people agree that those over 65 should live the highest quality of life for as long as they can--but at what cost to future generations? The authors appear to view this subject in a vacuum, as does the leadership of the American Association of Retired Persons. The federal budget deficit has not been significantly addressed in more than a decade, which raises the concern about lowering the standard of living of future generations in order to raise artificially the standard of living for the current generations through deficit spending. The Information Revolution may increase productivity, but can it create the wealth-producing industries that can restore and revitalize a decaying middle class for the coming generations?
Also, how can anyone project bright financial scenarios for the future when the average citizen's purchasing power continues to decrease year after year? It's time to take off the rose-colored glasses.
James H. Nicholas
As a boomer in his prime, I was heartened by your article on our retirement prospects. But your feature should have offered a few ideas to our legislators on measures that could stimulate personal retirement planning. I work for a small company with no retirement plan of any kind, and the president has absolutely refused to establish even a 401(k). So I'm on my own.
We desperately need legislation that frees employees of small companies (the vast majority of workers!) from the limits of the archaic IRA plan. Two thousand dollars a year maximum--what a joke. That won't even cover incontinence pads.
Your story states that "the primary force pushing health costs ever higher in the U.S. is technology, not demographics." Recent studies by the Health Care Technology Institute and Project Hope, studying both the cost and use of technology, estimate that between 1980 and 1990, when personal health-care spending rose 10.3%, new technology contributed only 1.6 percentage points annually, or about 15% of the total increase in health-care spending--hardly a primary force pushing costs ever higher. Technology is not a cause but a solution.
Thomas M. Loarie
Chairman and CEO