How Financial Crisis Affect on Baby-Boomers’ Retirement?
The “baby-boomers” ranging from ages 44 to 62 and belonging from the generation who were born between1946 and 1964 have been expected preparing to avail early or optional retirement and neither compulsory to retire this year from both public and private employments. But could it be a favorable time of the year to retire? Preference could be gloomy for the compulsory retirees and chances are slim to avail early or optional retirement. The retirement plans could be inhibited in this year’s financial crisis that plagued the American economy, wherein the federal government Social Security Fund is reverted into immediate allocations and recovering from economic recession.
Unfavorable retirement plans
Based on several reports on the effects of financial depletion, the purchasing power has weakened as a result of unemployment and the usual increase of cost in basic food supplies. Additionally, the public spending for realty and home purchase remain in the background beyond recovery of capital budget, representing the US government’s equity allocation on housing subsidy (Neikirk, 2008).
The financial downturn has also indicated the sudden decline of US market sourcing from counterparts and suppliers overseas, in which has also suffered the rippling effect of financial depression. One of this is the weakening of the labor market that is unable to sustain the manpower deployment that may be referring to replace the retiring labor force to continue the cycle of labor force chain.
Indicative of the financial crisis is the postponement of retiring plans of both public and private employees, due seeming variable amount of pension and retirement benefits coming from the Social Security funds. As explained, the continuing decline of the stock market [where capital stocks have been invested] could have affected both public and private stockholding which may doubly decline in the eventual volume of retirees, translated as a huge amount of “mandatory funds disbursement” to defray the retirement and pension benefits (Brandon, 2008).
At hindsight, the Federal Reserve Funds and the coffer of the government Treasury could be amassed of substantial funds disbursement for retirees. However, it cited in the reports that an alternative course of financial recoupment is to systematize the schedules of retirement that may “improve” the Federal Reserve from the “obligated” volume of financial benefits for retirees, exclusive of the compulsory retirement which may not be postponed or scheduled at the least waiting time. Thus, retirement benefit may vary at a devaluated amount as a result of the Social Security recouping on the financial outflow and inflow (Neikirk, 2008).
Findings and conclusion
The financial recoupment of the US government is perceived to have been enjoined by a financial system regulating the outflow of capital budget as a result of “recessive” spending at the time the economy has trimmed down the labor market and public subsidies. Having the capital budget for social security benefits has likewise defeated by the downsizing of the stock market [as a result of investment losses in the foreign exchange and trade] that has twofold effect on fiscal management pertaining to allocate “obligated funds”, such as the retirement and pension benefits.
In conclusion, it may be a wrong turn of a powerful economy to postpone or schedule the retirement plans of the employees who have shared the welfare to the rest of the citizenry through the Social Security Funds. The destabilization of the stock market and the foreign trade may not be a scapegoat but the government’s fiscal accountability through its Federal Reserve and the Treasury to specifically dealing with the retirement and pension benefits.
Brandon, E. (2008). ‘3 Ways the Economic Crisis Is Destroying Baby Boomer Retirement’.
US News.Com. Retrieved 01 December 2008 from
Neikirk, W. (2008). ‘Boomer Fears Rise as Market Falls’. Chicago Tribune. Retrieved 01
December 2008 from http://www.chicagotribune.com/news/nationworld/chi-social_securitynov02,0,169569.story.