“America is another name for opportunity” — Ralph Waldo Emerson

Americans are used to celebrating the 4th of July with fanfare and a renewed sense of national pride and independence, but unsound policymaking and a lethargic economy have lately left millions of people, especially retirees, feeling a loss of personal liberty along with the gnawing anxiety of an increasingly uncertain economic outlook.

A growing list of metrics — including shrinking pension assets, a melting Social Security fund, and a lethargic economy — is threatening to turn retirement, one of America’s most prized “institutions,” into a dreadful life stage for people ages 55 and older. 

For the last decade, experts across the political and economic spectra have raised the alarm over problems that could negatively affect the lives of today’s retirees in the short and long terms. Most specialists, including AARP experts, say these challenges cast a spotlight on a defining movement for America’s retirees: Their accelerating loss of personal independence in an increasingly uncertain world.

The Uncertain World We Live In

As a nation, we cherish Independence Day for its symbolic preeminence. We all aspire to be personally independent and enjoy a life of autonomy until and in retirement — but we sometimes forget the connection between (1) personal freedom and independence and (2) financial and retirement planning. Some workers and retirees would apparently rather leave such planning up to mutual funds and other Wall Street institutions, believing they can offer them a comfortable nest egg and a unique bulwark against the rapidly changing economic landscape.

However, retirees have not gotten the most bang for their bucks lately.

Times have changed; not long ago, retirement planning was considered no more difficult than moving a few pieces on a chessboard. You simply needed to pick a few blue-chip stocks, a solid mutual fund, some Treasury bonds, and maybe a CD at a reputable bank… et voilà! You were all set, trustful that your money would be safe, grow gradually and provide you with the resources you need to live comfortably in old age.

According to the Wall Street Journal, negative rates alone struggle to lift growth, and Americans nowadays can no longer expect a decent return on their savings, whereas anyone could have earned at least 5 percent on a no-risk CD as recently as autumn of 2007.

The shortfalls in Social Security and the Medicare funds have become legendary (infamous) and will pose a problem for all of us at some point in our lives — and the Baby Boomers will likely feel the ‘pain’ when they are most vulnerable.

Lastly, another stock market crash, barring a subsequent government bailout, could forever change the fortunes of millions of Boomers, making it unlikely this group will ever have the time or market opportunities necessary to make up for this potentially significant loss.

Policymaking Has Not Been Conducive

Inept policymaking in areas as varied as the economy, healthcare, employment, and monetary stimulus have renewed concerns over the fairness and purpose of government action. Has the FED’s rate-cut directives yielded the intended positive results?

Nobody can say for sure.

Have officials ascertained the impact of short-term policies on the lives of millions of retirees in the long term? The answer is fuzzy. Has the trillion-dollar stimulus program reduced unemployment, boosted U.S. competitiveness, and improved the socio-economic outlook for retirees, young people, and everybody in between? Not really.

“The stimulus failed altogether,” says Michael Grabell, a reporter for ProPublica and author of Money Well Spent? The Truth Behind the Trillion-Dollar Stimulus, the Biggest Economic Recovery Plan in History. Talking about money well spent…

Retirees Feel the Pain

Retirees in all four corners of the country are feeling the pain.  A Fidelity Investments report says that 48 percent of Boomers are not on track to be able to afford basic expenses in retirement. The Employee Benefit Research Institute (EBRI) echoes that figure, indicating in 2010 that 47 percent of the oldest Boomers were at risk.

Unfortunately, the numbers aren’t getting better — Six years later, in March 2016, EBRI released a report showing that retirement confidence is decreasing: In 2013, only 13 percent of workers said they were very confident about having enough money for a comfortable retirement, and by 2016, that percentage had increased to 21 percent. 13% and 21%, such are the grim numbers the nation must ponder.

Americans Don’t Seem to Care…But There Is Hope

Despite the retirement “mess” we are in, Americans do not seem concerned. We do not feel the need to do the math or take into account the array of obstacles that could mess up our road to retirement. Many seem to assume everything will be okay, trustful that the economy will someday rebound, and life will again be trouble-free as it was before the most recent crash.

Perhaps, they will be right.

It’s also possible that politicians will wave a magic wand and suddenly make everything better again — but most experts and laypeople alike consider that a highly questionable assumption.

Whatever way things turn out in the next, say, five, 10 or 15 years, it is hard to imagine anyone being worse off for having made a few preparations.

Preparation, planning, financial assessment, are all critical — as is personal independence. Being free in retirement means being able to do the things you want to do when your active working years are over. We might not associate freedom with financial planning, but in truth they go together like peas and carrots; after all, retirement is about having enough money to do the things you want to do when you want to do them.

These days, that’s the sort of thing doesn’t happen by chance.

Takeaway

As Americans, ours is a heritage of independence — but as a retiree, you should never take your personal independence for granted. With all the uncertainty of today’s world, it simply makes sense for rational people to focus on the big picture and begin taking steps to distance themselves from the most obvious of risks.

I think everyone understands no politician is going to ride in on horseback to engineer prosperity for all, and you’ll never convince central bankers to start adopting policies beneficial for all Americans, not just the financial special interests.

We are reminded daily that as free individuals, we are responsible for solving our own problems and improving our own lives.

I’m an optimist when talking about the future, but I am also a realist.

While I believe the best days are still ahead for this great nation, it doesn’t mean we won’t end up facing some troubling, and potentially very challenging times as we move forward.

It’s important to understand there are some great options available to you and your savings, and, at least for now, you still have time. But even the greatest plan in the world is nothing without someone taking the first step.