Over the holiday weekend my wife and I traveled to St Louis to attend a wedding reception for a young couple who have worked with us at summer camp for several years. During the festivities we talked shop with a fellow pastor. Instead of the usual discussion of organizational news our discussion was on the future, specifically our future, and the retirement plans we may or may not have. From the headlines I read I suspect workers in other fields and companies are focused on the same subject. Everyone is concerned about their future economic plans.

Some commentators speculate that French concerns over the future of their socialistic welfare state was a factor behind the vote to reject the European constitution on May 29.

Throughout western nations there is a growing discussion and concern over state pension plans, bankrupt corporate pension plans and declining populations, all of which factor into a looking crisis. It is not a crisis that cannot be solved, but it will take immediate action, involving some far reaching changes, to avert. The question is whether leaders and individuals can muster the will to do what is necessary.

Some of the statistics show the depth of the problem. The following comes from a recent Economist (subscription req) article:

In America...the Social Security system has gone from a worker-to-retiree ratio of 16-to-1 in 1950 to 3-to-1 today, and is expected to fall to 2-to-1 by 2030 - by which point spending on old-age entitlements would account for two-thirds of the federal budget.

The problems in Europe are even worse, thanks to more generous benefits and birth rates well below the rate of replacement. By 2030, for instance, Italy is expected to have a mere 0.7 workers for each retiree - ie, more people collecting benefit than paying taxes.

Britain and America, where much more of the burden of retirement saving falls on the private sector, seemed to be in better shape than continental Europe until the collapse of the stockmarket bubble. But this revealed billion-dollar holes in pension plans on both sides of the Atlantic, created by a combination of poor management, poor accounting oversight and the poor incentives of profit-minded managers who strive to keep company pension funds as lightly funded as possible.

General Motors has seen its debt rating termed "junk" and is in serious financial straits. Part of their problem is pension obligations. GM currently has 2.5 pensioners for every employee. No company has a good future with that type of burden. Yet the company, and many others, like United Airlines, has made commitments to people and the moral good requires everyone do what is necessary to not only fill the commitment but work for the common good.

The number one step, something everyone can do, is to to save money. Save money by putting back regular, and large, amounts. Savings rates in Western countries are at historic lows. But to have any kind of a secure future we have to put back money into accounts that will grow and provide a nest egg for retirement. some of the reforms proposed to bail out Social Security involve optional savings accounts that are managed by the individual and can be passed on intact to family members in case of death. This represents an expansion of existing programs such as IRA's and 401k matching accounts.

On top of these every wage earner should be adding additional funds into other instruments.

We are living longer and better lives. The individual is going to have to assume more responsibility for his or her future. There are personal financial principles that work and form a foundation for personal and collective security. Take a look at our booklet, Managing Your Finances. I'll write more on this later.