Sha-la-la-la-la-la, live for today

In 1967, The Grass Roots released a song that made it to #8 on the Billboard Hot 100 singles chart, “Let’s live for Today.” Rockers Stave Barri and P.F. Sloan, about 25 and 22 years old at the time, belted out:

When I think of all the worries people seem to find
And how they’re in a hurry to complicate their mind
By chasing after money and dreams that can’t come true
I’m glad that we are different, we’ve better things to do
May others plan their future, I’m busy lovin’ you (1-2-3-4)

Sha-la-la-la-la-la, live for today
Sha-la-la-la-la-la, live for today
And don’t worry ’bout tomorrow, hey, hey, hey
Sha-la-la-la-la-la, live for today
Live for today

It’s a fantastic song.  But, like many rock songs, it lacks fantastic advice.

Forty-six years later, it appears a considerable portion of those who loved the song when it was first released may have followed its counsel a bit too closely.  The generation that lived for today now has many worries about tomorrow.  Not only are they living longer than expected – and, as such, have more tomorrows to fret over – their retirement accounts are left wanting.

Financial analysts speak in terms of longevity risk, or the chance that a person will outlive their financial capital. According to a report by the Wall Street Journal, longevity risk is becoming a widespread problem on account of both factors that go into the calculation: (i) increasing life expectancy, and (ii) declining retirement savings.

According to the journal, a survey by The Employee Benefit Research Institute finds:

• 57% percent of U.S. workers report less than $25,000 in total household savings and investments, excluding their homes, up from 49% in 2008.

• More Americans (28%) have no confidence they will have enough money to retire comfortably than at any time in at least 23 years.

At the same time, the journal notes The Society of Actuaries revealed last fall that people are living longer:

• A 65-year old male in 2013 is expected to live an additional 20.5 years, up from 19.5.

• A 65-year old female in 2013 is expected to live an additional 22.7 years, up from 21.3.

The 28% of Americans who completely lack confidence that they will have enough money saved for retirement are probably not those who have long remaining work lives.  More likely, it’s the generation that first heard Messrs. Sloan and Barri’s hit song on the radio.  Now that this generation is on the cusp of retirement, their appreciation for planning and worrying about tomorrow may have increased, precisely because their retirement accounts have not.

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