Retirement -- The New American Luxury

America has always invented its own status symbols. A lifetime ago, status was being a two-car family or having air conditioning. A decade ago, it was huge houses with three-car garages. There was a time only the rich went on cruises, a status symbol whose cachet is long gone. Just like designer clothes and handbags, the aspirational aspects of American life have long been available to the masses.

But there's one luxury that only a few are still able to afford. And unlike fake designer purses, this luxury cannot be made in China and distributed to a vast group of demanding consumers.

That luxury is retirement.

And only a select few will be able to enjoy the reality of a life-ending decade or two, spent relaxing and pursuing hobbies. Retirement is truly the last exclusive luxury, increasingly available to only a limited group of people — a true status symbol.

The Impact of Demographics

It's partly because of demographics. The huge baby boom generation is the first modern cohort to retire without pensions. The conversion from defined benefit plans to 40l(k) plans started in earnest in the early 1980s. Those retiring today have spent the past 30 years working and investing for their own retirement — if they understood the importance of setting the money aside and if they had the skills to make smart investment decisions.

Even worse, the approaching generation of retirees is being hardest hit by the current economic slowdown. Many who had counted on using "extra" income for retirement savings, after paying off the mortgage and sending kids to college, are now finding themselves out of a job.

Just ask a few people who say they are "retired" and most will tell you it wasn't by choice. Their jobs left them before they were ready. And many are "consulting" or working part time in an effort to stretch the money they did save to make it last for their later years.

And the optics aren't good for the next generation, either. Only knowledge workers with higher education stand a chance at the jobs of the future. But to gain that knowledge, they are burdened with student loans, carrying interest rates far above what the government pays to borrow.

Federal student loans are not a gift, but a $1.1 trillion burden that makes it impossible for even those who have a job to build a future and save for retirement.

As we live longer, retirement becomes more expensive and elusive — two characteristics of a true luxury.

The Sad Facts

Social Security benefits represent more than 90 percent of total income for 34.2 percent of Americans over age 65.

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And for about 64 percent of those over age 65, that monthly Social Security check — roughly $2,200 after deductions for Medicare — represents at least 50 percent of their income.

You can understand the angst of today's senior population over the fact that the Fed is holding down interest rates to less than 1 percent. Even for those who saved a little, there is no chance for today's retirees to live on income from investments. They must dig into their savings to make ends meet.

And that does not make for a happy retirement — wondering whether your money will run out before you do!

The Easy Peek Into the Future

Are you on track to have a real retirement? It is human nature to bury your head in today's problems because the idea of planning for retirement seems insurmountable. The entire financialservices industry is running ads and commercials offering to help you through this process. But beyond the fear of the unknown, there also runs a nagging worry that the industry is basically out to help itself by selling products to you. Wall Street has earned a great measure of distrust.

You owe it to yourself to take an independent look at where you are heading. This coming week is America Saves Week, so this is a perfect time to start. The place to start is a website created by the non-profit Employee Benefit Research Institute: ChoosetoSave.org. Once there, click on the green box for the "Ballpark Estimate" tool. (There is now an app for this that you can download to your iPad or smartphone.)

This is a simple interactive worksheet that is completely anonymous. You can fill in your age, income, amount of current savings and other important information, as well as your desired retirement age and percent of current income. The calculator integrates expected Social Security benefits and pensions earned. Then with a click of your mouse, you can see whether you're on track to meet those goals. Or, given your current rate of savings, how far your standard of living will likely fall in retirement! And it will show you how much more you should save to reach your goals.

The Savage Truth is that you may never reach that status symbol of the future — a perfectly relaxing retirement that maintains your standard of living without anxiety. But it's also true that even a semi-retirement is better than none at all. Retirement is certainly a "status symbol" worth working toward. And that's The Savage Truth.