70 Is the New 65

Remember those television and newspaper ads of a few years ago with happy 50ish retirees living the good life in gated communities, playing golf and sailing, while enhancing their senior love life with Cialis as they sat in those bath tubs looking at the sunset. Well, those days are over, except maybe for the Cialis.

Both Fidelity and Vanguard have estimated that the average 401K loss last year from the economic meltdown was 28% of value. Translated into real terms, that means those early retirements with all the bells and whistles will have to be put off for awhile, a long while.

There is now anecdotal evidence from word of mouth on the street that most retirees expect they will have to work five more years in order to recoup their 401K losses; that’s if they keep their jobs and the economy rebounds sooner rather than later. I for one believe that the 28% decline in 401K value is gone forever and that people will just have to work longer, perhaps into their 70s.

It used to be that the American dream was a home, college for the kids, and a secure nest egg allowing people to retire in their early 60s or perhaps if they managed their money even in their 50s. That American dream is now a mirage with homes dropping in value, if not foreclosed by the bank, the kids having to put off college or go on the six or seven year plan and the unofficial retirement age at 70.

Experts who study aging and the senior set may see a golden lining in this 401K bust as the weak econmy may force older Americans to remain in the workforce, thereby keeping their bodies and minds active. But for most Americans who thought they could walk away from their jobs and head into the sunset, the prospect of another five or ten years of work is an horrendous nightmare.

Who knows, maybe there will be a quick turnaround in the economy followed by a bull market that sends the Dow skyward. But just in case that doesn’t happen, face the fact that 70 is the new 65.

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