The Elder Law Forum

The Elder Law Forum By Michael Myers Will Middle Class Retirement Become Obsolete?

I host a weekly radio show, also called "The Elderlaw Forum." It airs each Saturday over two AM talk-radio stations that blanket a seven-state region.

I conducted two back-to-back interviews this week regarding retirement planning. For working Americans and dual-income families, neither was reassuring. My guests described economic and political trends that threaten retirement as we have come to know it via the "three-legged stool" of personal savings, pensions and Social Security.

The first interview was with Professor Patricia Dilley, who teaches tax and employment law at the University of Florida Law School. She is the author of a law review article entitled Hope We Die Before We Get Old: The Attack On Retirement.

The second interview was with David Phillips, a Phoenix, AZ, financial consultant who is bearish on the stock market and cautions his clients to protect their assets against inflation. He is co-author of How to Take Advantage of Stock Market Index Growth Without Stock Market Risk.

Dilley sees a perfect storm developing for the middle class: A corporate America pulling back its social safety nets for pensions and healthcare; an ideologically-driven White House and Congress antagonistic toward the policies of the New Deal and Great Society; unprecedented federal deficits fueled by tax cuts and defense costs, and U. S. companies confronting low-cost global competition.

She noted that employers of half of the U.S. workforce offer no retirement benefits of any kind. Employers of almost 30 percent of the workforce only offer the opportunity for employee-controlled tax-deferred savings plans such as 401(k) accounts.

Phillips offered a sobering perspective on the value of savings. "If you saved $1.80 in 1984, it would only be worth $1 today," he explained. "That's an 80 percent decrease in purchasing power." Phillips urges his client to invest in indexed annuities.

Corporate safety nets are being shredded. Healthcare costs are being shifted to employees. American companies are facing global competition. Inflation is diluting a weakened U.S. dollar. And, the federal government is presently insolvent.

On the other hand, we still have historic low long-term interest rates, and its progeny � the "housing bubble." If it bursts, there may be some lakefront homes available at attractive rates. In your 70s, you could go there on your days off work.

(Pro bono legal information, advice and assistance is available to persons 55 and older through the USD Senior Legal Helpline, 1-800-747-1895; mmyers@usd.edu)

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