The United States has a severe savings problem, one so hardwired into our culture that it is institutionalized. You've heard that before, perhaps you've even warned your clients about it. The bottom line is that if you are using promised future cash flows from a client's defined-benefit plan in yourcalculations — employer- or government-sponsored — you had better be careful. Retirement promises will likely be broken — and sooner than you think.
The coverage of Romney's 47% speech proves the bias of each of the publications. The New York Times wrote and blogged (in one case mockingly) about how the "47%" are indeed deependent on government: they are old, infirm or poor. The WSJ published a leaked draft speech today that Romney never gave eloquently fleshing out Romney's views about the welfare state.
My own view is this: Forget about if promises will be broken.deserve it or not, but how can nearly half the people in this country get some sort of aid? How are we to support this giant, ever expanding entitlement programs in the future? About 70% of the federal government budget is spent on individual assistance programs. Whether the welfare state is fair or not is not the point. It's unsustainable and the programs need to be culled. You can't federalize everything on borrowed money indefinitely. If you think about it, retirement saving has been federalized with passing of the Social Security Act. A person born in 1935, the year the act was passed, was expected to live to around 61.7 years. Benefits kicked in at 65. In short, SS was never meant for everybody; it wasn't meant to actually pay out much other than truly old people who needed a safety net. Now the average person born today is expected to live to be 79. Hmm. Houston, we have a problem. As we wrote a few years ago,