Why retirement funds are shrinking; The Graying of America: Retirement and Why You Can't Afford It, by James Jorgensen. New York: The Dial Press. $10.95.

By , Geoffrey Colvin is on the staff of Fortune magazine.

It's a disturbing problem that James Jorgensen takes up in "The Graying of America," and one that each of us will face (although we probably won't take it seriously, as he points out, until we're 60). In brief, this is it:

* Unless you have thoroughly researched your company's pension plan, you'll probably be unpleasantly surprised at how little it pays you on retirement.

* Your company's pension fund may not have enough money to pay all its promised benefits; and while the company is obliged to make up the difference, that difference may one day be too big to make up.

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* Saving money for your retirement is just about hopeless, because if you don't have a lot of money to put away it's nearly impossible to get a decent rate of interest.

* Social security is a gamble, because the elderly population is growing faster than the young population (that's the graying of America), so payments from social security are growing faster than contributions to it.

* No matter what your source of retirement income, inflation at current rates will make short work of it in a few years.

These are disheartening facts of vital interest to nearly everyone. A solid, dispassionate presentation of them would make riveting reading. So it's a mystery why James Jorgensen, a California insurance underwriter, chose the florid, rhetorical style that makes much of this book sound like Radio Moscow. Talk of "tyrannical pension fund managers" and "greedy bosses" adds nothing to our understanding of the problem, although it makes us wonder whether Jorgensen is being square with us in the rest of the book. The simple facts of the retirement problem are alarming enough; we don't need the author informing us of our alarm at every turn ("A whopping interest rate of 22 percent. That's what it would take, to your utter surprise").

Occasionally he falls into lapses. After working himself into a paroxysm of bitterness over the lavish decor of modern banks, he concludes bitingly, "When banks are actually earning more interest than their depositors on the deposits, nothing is too good for the small saver." In his rage he seems to have forgotten that if banks weren'tm earning more than their depositors, they wouldn't be in business.

But beneath the occasional errors and frequent angry sneers, Jorgensen cites some important facts and makes some valid arguments. He explains how pension funds came into being among the railroad companies 100 years ago, and how they're run today. He argues convincingly that federal regulations that restrict bank interest rates are a ludicrous and tragic burden on the small saver. He describes the shockingly generous retirement benefits paid to government employees at the taxpayers' expense. He reminds us that while our contributions to social security are mandatory, Congress can do whatever it wants with the money; there's simply no way of knowing what we will eventually get back. Perhaps most disheartening, he shows how inflation at realistically expected rates can destroy any retirement plan.

Inevitably a book like this makes the reader wonder what he can do. The sad answer for most people is: not much. You can investigate your company pension plan and find out what you can honestly expect to receive from it. You can look for the highest-return forms of investment available to you and start using them. But what can you do about inflation? What can you do about congressional action on social security years from now? For most of us, the short-form prescription for retirement would seem to be: Inform yourself, pre pare yourself , and hope.

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