Apocalyptic Headlines About a Looming ‘Retirement Crisis’ Are the Surest Sign That There Isn’t One

Quick question: how many of you readers were “demanding” the internet in 1995? Or a GPS function on your mobile phone in 2005?

The speculation here is that in 1995 no one reading this write-up had any yearnings for the internet, while in 2005 demands mirrored those of ’95. Please think about this for a second.

Having thought about it, what if the internet were to presently cease functioning for a day, a week, or even an hour. Would your situation feel crisis-like? What if the GPS ceased operating on your mobile phone?

The not-so-unreasonable speculation here is that the near-term loss of the internet and its myriad functions would elicit somewhat crazed frustration for a substantial majority of those reading this column. And it would despite the fact that more than a few readers made it through the majority of their lives without either the internet or GPS.

Ok, but what does any of this have to do with the so-called “retirement crisis,” or lack of one? When you think about it, quite a lot. For starters, it’s a reminder that “crisis” is a relative concept. While a lack of internet would be a crisis for most of us today, less than 20 years ago a lack of internet defined most of our waking hours. Figure that until the rollout of smartphones with constant internet connections, access was largely a function of being at a desk. Now internet connectivity is all the time, and we’re in a sense on the internet all the time. Yes, crisis conditions without what factors into so much of our daily existence.

It’s important to keep in mind with the notion of “retirement crisis” top of mind. If you Google the latter, over 100,000 search results come up. The headlines are scary, and include “Baby Boomers, the Richest Generation, Are In the Middle of a Retirement Crisis (Barron’s)“, “High Retirement Anxiety for Millennials and Generation X (Forbes)”, and “America’s $7 Trillion Retirement Crisis Is Only Getting Worse (Bloomberg).” What should readers do? If the pundits are to be believed, the future is bleak. Except that it’s not, and retirement similarly won’t be. These headlines unwittingly vivify why we should be rather optimistic about the future that awaits. Think about it.

For one, the fact that there’s even the presumption of a retirement crisis speaks to how much better life is becoming. That is so because the very notion of “retirement” indicates that in the abundant world we live in, there will be a future life defined by leisure when the decision is made to stop working. Yes, we live at a time when it’s possible to live without working.

For two, consider the meaning of a cessation of work and what life will be like after we stop. That we consider this is a signal that in addition to becoming more and more abundant, life expectancy is growing by the day. Indeed, the expressed worry about us not having enough for retirement is rooted in the very real possibility that life after work will be long, and defined by activity.

For three, implicit in worries about costs related to retirement is that we’ll have all sorts of ways to spend our savings when not working. It hopefully brings to mind for readers why internet access and GPS functionality led this piece. Capitalists routinely create new products and services for us that we formerly had no inkling of, but that now we can’t live without. This is important to think about while contemplating retirement simply because the feared costs of retirement are rooted in exponentially more purchasing options while retired. Contrast this with 25 or 50 years ago when our consumption options relative to today were extraordinarily small.

It’s all hopefully a reminder that improvements in living standards and life expectancy very much inform the expressed pessimism about retirement. The pessimists don’t know it, but they’re once again explaining why what has us worried should have us optimistic. Put another way, the profit motive provides, and it will provide abundantly when it comes to retirement.

How do we know this? See the last headline. A $7 trillion retirement crisis? If it’s that large, then imagine the feverish effort presently being put forth by the profit motivated to capture the fruits of what is allegedly an unmet need of “crisis” proportions. In other words, the future is bright for retirees precisely because market problems are what mobilize brilliant market solutions.