On a global scale, there are economic woes all around. Europe is suffering from its debt crisis, while Japan continues to clean up from its triple catastrophe (earthquake, tsunami and power plant explosion). Third world countries, in general, are in a growth mode. As more people move into a middle class status, the overall increased demand for food and gas products push consumer prices up worldwide.
Here in the US, our congress continues to play a game of chicken with the debt ceiling, making the markets and businesses more nervous. Markets don't like uncertainty. This causes investors to become "investment shy" and hold more money in cash instead of investing and spending, which causes a decrease in our country's GDP (gross domestic product).
Businesses don't like uncertainty either, so they continue to hoard cash on their balance sheets instead of hiring new workers. The June unemployment numbers were dismal at best. And unemployment for teenagers (16 to 19 year olds) is at almost 26%. This is where I step off the observation train and start riding the "what if" bus.
Americans are woefully unprepard for retirement. A current report from the GAO titled "Retirement Income: Ensuring Income Throughout Retirement Requires Difficult Choices" suggests a number of retirement strategies including working past the current "normal" retirement age of 62. It seems that as Americans live longer, they need to work longer to cover basic and medical care, but what is happening at the lower end of the age scale? Teenagers are not working. College students are finding it more difficult to find a job. Schools are not preparing students for the work that will be available for them when they graduate. There is a disconnect between education and business needs in our country.
Businesses will need to make choices when hiring in the future. Do they choose a seasoned, dependable older worker who may have some health issues, or do they choose a green, inexperienced younger worker who needs specific retraining? My fear is that they will choose the older workers who need jobs, leaving the unemployment rate for young Americans patheticly low. If young people are not working, they will not gain the practical skills needed to propel this country forward and they will not earn the money they need in order to retire - ever! France recently faced this issue with protests and riots.
On the flip side, if busineses hire young people and not older workers, the young may end up taking care of their parents financially during their retirement. Much of the elder care in this country is done by women. Women already work fewer years than men. Taking time off to care and manage senior parents may cause women to continue earning fewer Social Security credits, reducing their potential for retirement income.
My conclusion is this: start investing for retirement now, no matter what your age. Be sure you can retire comfortably and open the door to younger workers so they can begin saving to do the same. The best gift you can give your kids is to be secure when you retire so you won't have to depend on them.