No Reason to Panic

     I make a habit of reading the news and trolling through retirement sites and perusing the financial pages, and I have to admit, sometimes they get me pretty discouraged. Actually, to be perfectly honest, sometimes they send me into a panic. Social Security is going broke. You're not saving enough to retire. Your medical bills will bankrupt you in retirement.

     But then I pause and realize it's time for me to stand back and try to gain some perspective. A lot of the advice we get about retirement comes from people trying to push a political agenda, or sell us a financial product -- two sources that we should take with a large grain of salt.

     I'm not saying we shouldn't live prudently and save for retirement. To paraphrase one comment I saw recently:  If you spend all your money while you're working, and save nothing for retirement, that's exactly what you'll have when you retire -- nothing.

     But too much anxious advice about retirement can be enervating and counterproductive. Because often what you see just isn't true, or it may pose a problem down the road but is nothing to panic about now.

     For example, some of our budget hawks in Washington run around telling us the sky is falling on Social Security. But Social Security has the resources to pay full benefits through the year 2032. That gives politicians 20 years to make some adjustments.

     Even if you believe (as I do) that politicians are more concerned with their own careers than they are about the future of our country, this still gives them plenty of time to argue out the issues, agree on a few compromises, and pass some laws amending the program. But even if politicians do nothing for 20 years, Social Security will be able to pay 75 percent of its obligations. Now, nobody wants to take a 25 percent pay cut. But that's not the same thing as going broke.

     Meanwhile, financial experts from banks and investment firms keep telling us we're not saving enough for retirement. According to a report from LIMRA, an association of insurance and financial companies, some 49 percent of Americans aren't saving for retirement. But that figure includes people in their 20s, who certainly have higher priorities.

     Another survey from the Employee Benefit Research Institute found that 44 percent of Baby Boomers and Generation Xers are not saving enough for retirement. But that doesn't mean 44 percent of Americans are destined for a life of poverty in their old age. Many of the 44 percenters have built up some nest egg -- just not enough to satisfy the experts. Maybe they won’t have enough to live the dream retirement lifestyle, but they probably will have enough to stave off starvation and keep a roof over their heads. Furthermore, it's younger Gen Xers who are more likely to be behind on their savings than Baby Boomers. And those Gen Xers—people in their 40s—have time to catch up.

     How about the War on Seniors? Ben Bernanke has allegedly declared war on seniors by keeping interest rates low. President Obama has supposedly declared war on seniors by raiding Medicare to pay for his health plan. And a Romney economic adviser callously joked that outsourcing seniors to Third World countries might lower Social Security costs.

     A proposed Republican budget plan aims to balance the federal budget on the backs of the elderly—privatizing Medicare and getting rid of Social Security entirely. But remember 2005? A re-elected President Bush went on a tear with his idea to replace a part of Social Security with individual retirement accounts. He got nowhere fast. Of course, seniors should be watchful of politicians trying to target retirees for major cuts in benefits. But the idea that there is an organized war on seniors is the product of politics and paranoia.

     And finally, some so-called experts warn us that we're fools to think we will spend less in retirement. But while I think maybe that's true if you have a bucket list that includes extensive European vacations and shopping excursions to Rodeo Drive, it's not true for typical retirees. For example, as retirees with lower earned income and some investment income, we pay lower taxes. Our housing costs go down, especially if our mortgage is paid off. Our local government likely offers a senior discount on real-estate taxes. And many of us downsize our family home to live in a smaller, less expensive area. Also, presumably we will not be supporting our kids. And don't forget: We no longer have to set aside 5 to 10 percent of our income to save for retirement.

     Of course, I'm relatively new at this. I've been semi-retired for a while now, basking in the afterglow of my final college tuition payment. Do you think I'm living in a fool's paradise? Do you think I should be biting my nails and developing an ulcer and . . . paying more attention to the news?