Santa Claus must be tired, but he may never reach retirement.

If Santa’s a US citizen, he may be among the 33% who have saved nothing for retirement.

Tired Santa Clause

Tired But NOT Retired

Santa as a homeowner may be among the 16% of elderly who have negative equity in in their homes, or among the 6% in foreclosure.

This is not the message that any of us wants to hear. Especially now, as we thrill about the gifts we’re about to bestow, for which we will be paying for several months.

 

Social and cultural norms continue to pressure Americans to acquire additional debt, even though incomes have been declining. Savings rates are at about 5% (which is pretty low by global standards and most actuarial recommendations) and have been declining for 40 years.

Household debt in the US has gone down slightly since the Great Recession, but remains high as a percentage of disposable income (105%).

The bottom line is that Santa and many baby boomers will forego retirement.

More people working later into their “golden years” will have a number of curious effects. One will be a drag on household income statistics. An article in The Economist pointed out that slow or paltry wage growth has been a political issue fueling populism and the popularity of politicians reaching out to the “disenfranchised.” Incomes in America and other developed countries reach their highest point among the middle-age demographic cohorts, then decline.

The median household income among the 45 to 54 year old cohort in 2014 was $71,000, whereas among the 65 to 74-year-old cohort it was only $45,000. Aging demographics in developed countries creates downward pressure on incomes. However, while the older cohorts have lower incomes, today’s seniors are far better off than their counterparts were a generation ago. In the US, incomes in households headed by 65 to 74-year-olds today are almost 30% higher than in 1989.

Another curious and still unresolved effect of larger numbers of geezers working into their elder years is impact on succession within corporations and other organizations. Much has been made recently about the psychological, cultural and attitudinal differences between boomers and millennials. It shouldn’t be surprising to encounter situations where the silver haired leader will not let go, the gel haired millennial is trying to take over, and the Gen X manager is trying to referee.

But don’t scuffle too loudly; Santa is in the corner taking a nap.