Telling It Like It Is

THE ENTERPRISE--Happy Memorial Day

THE ENTERPRISE

Happy Memorial Day
We enjoyed an American ritual today as we went to our town's Memorial Day parade.  There were no flashy flowered floats.  There were a lot of American flags, some local officials, representatives of veterans groups, lots of Boy and Girl Scout troops and marching bands from local schools.  There were also a lot of American's enjoying one of our most basic freedoms--the right of assembly.

Whenever some lily livered pacifist starts waxing eloquent about how we must be careful that we don't offend the people who have been attacking us for more than two decades, I wish I could "slap him/her silly" as my grandma used to say.  She was right!  Now as we face another 1-1/2 years of "campaigning" we'd be wise to listen carefully to what the candidates say about protecting our freedoms and challenging our enemies to back them down.  I won't defend much that the Bush administration has done well or lately, but it has been steadfast about defending America, its rights, its way of life and its freedoms.

On this Memorial Day, I pay tribute to the brave souls living and dead who served to protect us all, so we can enjoy the American way of life.  Why else do you think so many immigrants want to come here?  Tony Blair got it right when he said, "You can judge the worth of a country by looking at how many people want to enter compared to the number that want to leave."

RANDOM ITEMS THAT MIGHT BE INTERESTING
---AFGHANISTAN'S EASTERN FRONT--PAKISTAN
It's the new home for Osama bin Laden, and much of the Taliban too. It is virtually ungoverned, despite the assurances of our so called friends in control of Pakistan.  Don't be fooled by phony diplomacy.  We have few "friends" around the world these days, and fewer yet in the Middle East and neighboring countries.   We need to crack down on Pakistan and get this huge, rugged area cleaned up or cleaned out....and Pakistan has to help...as does Afghanistan and other neighboring countries (including China.)

---TORTURE OR "ENHANCED INTERROGATION TECHNIQUES?"
OK, if you are trying to pry information out of a truly bad guy (gender neutral for those PC readers), what should you do, say "pretty please?"  I am with the Jack Bauer/24 school of interrogation--stop the terrorists and get it out of them however necessary.  I know, once in a while someone who knows nothing or is truly innocent will be abused.  That is the price of a "war on terror."  Read a Vince Flynn novel--there are nine of them out now, and see how his protagonist Mitch Rapp deals with this issue--and the issue of government waffling, political correctness, bleeding heart liberals, etc..  Right on-- Mitch Rapp and Jack Bauer--you have the right idea!

---CHEATING--A CULTURE WE CULTIVATE
Duke holds the current record, with 34 cheaters exposed and expelled from its vaunted B-School,  but with 56% of B-School students admitting to cheating, there are many more cheaters.  A lot of them will find their way into corporate jobs where the culture of cheating might be tolerated in the name of being "good soldiers" to a misguided management.  Watch for them!

---"SLOW GROWTH" IS NOT "NO GROWTH"
Don't panic yet.  Once again, our upside down logic is threatening a recession.    The headline read: "STRONG HOUSING SALES SEND MARKET TUMBLING."  What?  Right, you read it right.  The market dropped because of concerns that the strong housing sales would keep the Fed from lowering interest rates to stimulate the economy.  But, it appears the Fed is steering us to a soft landing so far.  And remember, low growth--in the 2% range--is still growth; it's not NO growth or negative growth--which is the definition of recession.

THE BIG ISSUE---
---IMMIGRATION
Last rant for today:  Why can't these politicians get it right?  Because the ones leading the charge are thinking wrong or not thinking at all.  As long as Ted Kennedy is in the leading group drafting the immigration legislation, expect the worst.  It is not rocket science--not easy or fast--but simple enough.

1-Define the problem; 2--Solve the problem. 
----Problem 1:  more than 12 million illegal immigrants here now, which can't be found or deported (practically speaking), so find a way for them to "come forth and get legal." 
----Problem 2:  Many still coming, need to be identified and tracked until we know where they are, and what they are doing toward becoming citizens or going back to where they came from.   "Identify and track them."
----Problem 3:  They don't assimilate and employers hire them, retailers and banks extend credit and they are treated almost as if they are legal--but they are not.
----Problem 4:  There are a lot of them, and we need even more, to help do the work Americans can't or won't do, so they need to become citizens and then get rights, like voting.  But it must be done right, or they will become a "under-culture" and cost more than they contribute.
----Problem 5:  We have long borders that are hard to patrol, and most illegal immigrants come from the south from Mexico, because it is poor and it doesn't control its borders--so stiffen up--including a fence, electronics, the whole deal.

How to write the law?  Here is a crude, incomplete shot at it.

--1) "Amnesty" over time, with qualifications and penalties is inevitable.  Unqualified amnesty is wrong--a reward for breaking the law.   

--2) Sign up and admit you are here illegally (vs. being caught) in the first 6 months, get an "Immigrant ID Card."

--3) Issue tamper-proof, RFID-based "Immigrant ID Cards" and require a sign-up once each year to confirm whereabouts until they become a citizen.  Make the penalty for forged/forging ID cards a felony, punishable by immediate deportation (immigrant) or incarceration for 10 year prison term without parole (citizen/employer).

--4) Do not grand driver's licenses (voiding of any already issued) without a "immigration license card".  Mandate cancellation and reissue of all credit cards, debit cards, and other forms of corporate ID based on proof of legal status (the Immigrant ID Card and appropriate INS  papers..   

--5) Demand valid Social Security Card and an "Immigrant ID Card prior to employment--or to continue employment.  Punish employers for failure to comply.

--6) Make English the required language--both if immigrants and officially for the USA.  NO voting until an English exam is passed.

--7) Increase quotas both for critical skill needs (substantially), and also increase quotas for family members who were "left behind" --provided they all enter properly and immediately register for their Immigration License.

--8) Offer a choice to those who are caught violating or ignoring this new set of laws.  (Allow 6 mo. from passage date to comply.):  Immediate deportation (regardless of family members left behind) OR 2 years incarceration in a penal colony--on the US border as a worker building "the fence."

--9) Build the damn fence--don't just talk about it.

Is that so hard to understand?  All the politicians need to "bend some" to make this work right for all Americans--present and future.

Almost all of us came from immigrant ancestors 2-3 generations back.  These immigrants were not always welcomed into the US  with open arms, but in many cases, they were welcomed because workers were needed.  In those two generations, most have assimilated into the American culture, speak English and think of themselves as "Americans."

That should be the goal of this immigration plan.  Not punitive per se, not even all that selective--but make it a must that immigrants sign up, sign in and until "assimilated" either through time, language or culture, do not get all the rights of American citizens.  Once they are "citizens" they are "Americans" with all the rights and privileges this great country offers--including attending the Memorial Day parade and serving in our military forces.  Wouldn't that be something to celebrate at future Memorial Days?

Best, John

THE ENTERPRISE--A Sad State of Affairs

THE ENTERPRISE

SLOWLY BUT SURELY--BUT TOO SLOWLY
Here we are 6+ years into the Bush presidency.  It took him a few years and a couple of tries to remove and replace his poor choices for economic advisers, but in Treasury Sec'y Paulsen, he finally got a good one.  It took longer to replace Defense Sec'y Rumsfeld with Gates (should have been done after Bush's first term and Rumsfeld's mistakes--and unpopularity--were SO obvious). George Tenet's departure at the CIA was way overdue.   Now someone has to rebuild our nation's leading Intel gathering organization--and fast. Now Wolfowitz is gone too (Too bad the World Bank isn't going with him--it has outlived its usefulness.). 

Att'y. Gen. Gonzales will be next--just too much "smoke" in his misadventures for there to be no "fire."    Karl Rove should be on the target list as he is a "negative attractor," but he isn't.   V. P. Dick Cheney has marginalized himself, and only Condoleeza Rice remains with any credibility--and that is waning.   
As for President George W. Bush's greatest strength--his courage of his convictions; it has become his greatest weakness: a determined and insular stubbornness worsened misplaced loyalties.  What a sad state of affairs.

A SAD STATE OF AFFAIRS--AND THE NEXT ELECTION IS ONLY 18 MONTHS AWAY.
When an incumbent president is a campaign liability, it speaks volumes about how bad things have become.  Hopefully, the American public will see the failings and weaknesses of the candidates offered by the Democrats and not fall for "anyone else is better" campaigning.   The choice of our next President is so important, that the protracted "campaign" may actually be a good thing.

Hillary is, well, Hillary--damaged goods, strident, uninspiring, polarizing, ... and somehow we have to break the reign of the "Bushes and Clintons" which will be at 20 years soon. Obama is still unproven, except as an articulate rookie with NO proven leadership skills, and few policy positions on anything except to take us back to the days of FDR.  John Edwards--who is he kidding--hypocrisy is thy name, Mr. $400 haircut, pretending to be the "defender of the poor."  Al Gore--who is he kidding--he flies around in his private plane, to and from his huge home, using energy like crazy (but he is buying "carbon credits" to offset this?)
(I want to try that with Pizza, Krispy Kreme donuts and Oreos with milk--if only I can find someone who likes rice cakes and celery to swap calorie credits with me so I can eat what I like and not get fatter!!!)

THE NON-CANDIDATES
Newt Gingrich (Very smart and experienced, but not officially running yet, and probably tough to elect) or Fred Thompson (Somewhat known for his acting, a good speaker, inspiring, articulate, but oddly lacking in "fire and passion"--and still not a declared candidate either)--both would be better choices than Hillary, Obama, Gore or Edwards.  (Late breaking news: NYC Mayor Bloomberg is very rich, long shot; a wild card, but one that I have not yet studied.)

BETTER OPTIONS--RUDY IS ONE, BUT BETTER YET:  MITT ROMNEY
Rudy Guiliani is a proven leader (one of few running) who "did it" under very difficult conditions (in NYC & after 9/11), and would do many of the right things.  His personal life is an issue, and unfortunately in today's target rich, media circus, it will be a problem.  Divorces, affairs and estranged children are hard to "explain away."   John McCain is a good man, but he is simply too old and too "worn"  to serve 8 years in such a demanding job--but his strength of will and convictions are badly needed in the Senate.  The "seven dwarfs" are all probably capable people, but none of them has the stature and inspirational leadership persona needed.  In a different setting, Mike Huckabee might be a stronger "dark horse"  but not this time around.

At this early date, until I learn something changes my opinion, I lean toward Mitt Romney.  I can easily imagine him as our President.  He seems to be bright, articulate, measured, and a man of character AND competence.  Romney's Mormonism doesn't bother me, because I know too many Mormons who are fine people and are nothing like the "extremists"  that some fear.  Romney comes from a distinguished family,  is a proven civic leader (turned the troubled Salt Lake City Olympics into a big success) a strong, electable government leader (a Republican who was elected Gov. of a strongly Democratic state--Massachusetts), a successful businessman (founder of the very successful Bain Capital) and a strong family man.  Why he hasn't gained more traction in the polls, I am not sure.  Maybe not enough people know enough about him.

From what I know now, Mitt's the best of all the candidates, regardless of party affiliation. 
I suggest you click here and check him out:   http://www.mittromney.com.
I think you'll be favorably impressed. 

A SOFT PATCH, NOT A RECESSION--UNDERSTAND THE FACTORS
I hear footsteps--of people running scared, prematurely.  The housing slump has hurt, but may be at or near the bottom.  Lower defense spending was actually a factor in holding down the 1Q GDP.  Business is cautious in investing, as it should be right now.  Many companies, especially large retailers are cutting inventories (maybe too much!) which ripples through their suppliers.  BUT, the 1Q Consumer Spending component (70%) of the GDP was up 3.8% and unemployment is still 4.5%, while the Institute for Supply Management's April index went UP to 54.7 (from 50.9 in March), and this is real business people "voting" what their plans are.  Sure, we are going to see a "soft spot" from now into the 4Q, but at 1.3% overall GDP growth, we are still not in recession, and probably won't be anytime soon.   What to do now?  Hire the best, cut the fat and get rid of the worst performers and any "fat." Watch spending carefully,  but don't sacrifice the long term because of a "soft patch."

BEWARE THE NEW IMMIGRATION BILL
I have not researched the content, but any bill that was compiled secretively, and is a product of Ted Kennedy's strong input, is probably worthy of scrutiny--and likely one I won't agree with.  "Amnesty" per se is not the problem.  It is the consent that it's OK to start your life in the US with a criminal act--illegal entry.  Dennis Miller says it nicely, "We just want immigrants to 'sign the guest book" on their way into our country, and then act like responsible people once they are here."  This bill needs some hard analysis, and probably should NOT be passed in its current form.

A NEW, REVOLUTIONARY TECHNOLOGY AND AN UNNERVING FUTURE OUTLOOK
Here is the latest and greatest pair of concepts, about which I will write more as time goes on.
---The first is the one is a concept developed and explored by Ray Kurzweil, a brilliant inventor, in his two books, THE AGE OF SPIRITUAL MACHINES and THE SINGULARITY IS NEAR.  It is the "curve" of exponential growth in technology and specifically in computer intelligence and computing capability.  Kurweil postulates that computer intelligence will exceed human intelligence within the next two decades.   This has huge and profound implications for all of humanity.
---The second concept is Wireless Mesh Networks.  This approach has the potential to make super high speed bandwidth available to huge numbers of people at very low cost.  It uses very small (basketball sized), solid state, multi-channel access points (APs) spaced rather closely together (in Colleyville, TX where there is one of the first commercial installations, 12 APs cover 5 square miles.)  There is a lot more detail that I don't have space here to describe, but just imagine high speed Wi-Fi coverage "everywhere," at minimal or no premium cost.
Imagine what these two in combination could lead to.  Everybody, connected to everybody else, and to everything, everywhere, but with computers starting to contend with humans for "who (or what) is in charge!"  (Deedle-deedle-deedle)

A SELF-FULFILLING PROPHECY?
A closing thought about the War in Iraq.  Polls tell us that the majority of Americans are "tired of it, don't think it's worth any more spending or sacrifices, etc."  in other words--against it.  OK, I get that.  The question is WHY they think that?  Most Americans couldn't find Iraq on a map if their life depended on it--(and their freedom might.)  Many of those polled can't name the Vice President of the US, the Secretary of State or Defense, or the General leading the US war efforts.  In a word, the majority of the population is simply UN-INFORMED.

The public in general is against the war because everything they know and are being told about it informs them that they should be against it.  Sure, there are smart, informed people who think the premise of the war was flawed, and its execution was awful--and they are mostly right.  BUT, the major media coverage on Iraq is almost all negative, whether it is true or not, balanced or not.   (An old newspaper saying, "If it bleeds, it leads.")  If the news from Iraq (and it IS A MESS) it reflects badly on the Bush administration and its actions--the media will lead with it, and that is what "informs" most Americans. 

What are the American people supposed to think?  Nobody sponsors and runs a feature: "The good news in Iraq today."  Nobody.  If there was as much negative publicity about the incidence of violent crime and murders in American cities as on the Iraq war, and if the public was led to believe that forming vigilante groups would improve law enforcement and reduce that crime and loss of life, what do you think would happen?

Bottom line:  you reap what you sow.  People see what they already believe--they do NOT believe what they see--studies have proven this.  Blanket any population with skewed information, and add a story that is ugly to begin with, and they will want out--at any cost.  But that is what leaders are for. 

Leaders must understand and act based on reality.  When our leaders (including the President) are believed to be (or portrayed as) doing that, public opinion will shift back to their support.  Until then, the leadership void is a problem.  Nature abhors a void and something fills that void.  In this case it is un-informed, mis-informed, poorly informed and occasionally, a well-informed opinion.  And you know what they say opinions are like--(and everybody has one).  I guess this is mine!

Best, John

THE ENTERPRISE-Complexity's Latest Victim

THE ENTERPRISE

THE ECONOMY & STOCK MARKET--FREIGHT CARRIER WEAKNESS, PRODUCTIVITY GROWTH
I have no idea where the stock market is going.  Probably up, because the weak dollar is generating solid foreign income for US companies, offsetting a lukewarm domestic performance.  Foreign Direct Investment in the US continues to set new records, so the foreigners must be more optimistic about our country as an investment than we are.  Warning signs are popping up, and bear watching.  Productivity has slowed, but that is to be expected at this stage of an economic cycle, and it is another of those misleading government statistics that might be revised dramatically in coming months--another "OOPs."  A more concerning one is the weakness predicted by major freight carriers including UPS.  That one is usually a more accurate predictor of an impending slowdown in the economy. 

A GOVERNMENT IN CHAOS-IMMIGRATION, IRAQ, ENTITLEMENTS, DEFICITS, AND MORE
It is discouraging that our bifurcated government can't seem to agree on anything except their disagreement on almost everything.  Our system of checks and balances has become a formula for gridlock, paralyzing the country.   It will take a new bunch of smart, wise and courageous leaders to break this logjam.  Consider that need as you weigh current Presidential candidates, because change must start at the top.

ITALY'S RETIREMENT AGE...AND OURS
Just an FYI:  Everyone seems to think that raising our retirement age for Social Security is a radical idea.  How about setting it like it was originally intended to be set:  about the same as life expectancy?  That would create chaos, but that was the original plan.  When Social Security was created in the 1930s, the retirement age was set at 65 because average life expectancy for a working male (then most of the work force) was only 63.  Now it is 77!  It's not too radical to get the retirement age up to 70 in the next 4 years...one year increase each year.  Oh, yes, if you wonder why European countries are facing some economic and demographic crises, the debate in Italy is whether to raise the retirement age from 57 to 58.

WORLD BANK--MINDLESS GIVEAWAYS & CORRUPTION--UN = NOT MUCH BETTER
Paul Wolfowitz is just a little piece of the problem.  He should be removed, but the institution of the World Bank should be eliminated.   Like the UN, it was conceived in the 1940's with a purpose that was ill-conceived (fight poverty by collecting money from the rich and distributing it among the needy), and executed with the typical waste and corruption most such institutions inevitably fall into.  It's time to get rid of it and quit wasting US dollars funding the mess it has become.  The same goes for the UN.  If the US wants to balance its budget it would help to reallocate the $XX billions (it's incredibly difficult to find ALL the money that flows to these two organization in the budget--I tried--it is "billions")  IF we would CUT ALL FUNDING TO THE WORLD BANK & THE UNITED NATIONS.  Both would collapse--and I say--"good riddance."  (FYI--We even "loaned" the UN $1.2 Billion in 2006 to renovate its NYC HQ--UGH!)

INFRASTRUCTURE:  CHINA, INDIA AND USA
Pundits love to point to how China's great growth and success have been enabled by its massive investments in new infrastructure.  Yet, China pales when compared to the USA.  Those same analysts and writers explain why India will be hampered by its inadequate, crude and/or non-existent infrastructure (roads, public utilities, water, sewer, etc.)  There is one place being overlooked that will come to the forefront.  Since the US created its Interstate highway system almost a half-century ago, spending on infrastructure has lagged--badly.   Private enterprise keeps the energy utilities going in most cases.  As our population continues to grow and more cars than ever are clogging our freeways, it seems that no one is paying attention to the Interstates, to bridges and much, much more.  The result--another huge tax drain as we fight to deal with energy independence and runaway entitlements.  Maybe we will all start driving on "blue highways" (the old roads) because the new ones have become glorified parking lots.

CHINA'S NEGLIGENCE--PET FOOD IS JUST THE TIP OF THE ICEBERG
We get almost everything from China these days, including, it now appears, food that is tainted with supplements unacceptable even for the tough digestive systems of dogs.  This is just the first of many such incidents in which an undisciplined, rapidly growing economy creates global havoc by its negligence.  It is already poisoning its own people with polluted air and water.  Now it's our turn.   Beware.

TOYOTA--NOT INVINCIBLE
Recent earnings reports by the world's number one auto maker prove that even the vaunted Toyota is not immune to problems caused by rapid growth and proliferating complexity.  It has incurred more recalls, more quality problems and related "service programs" recently than ever before.  It even announced that it would slow down new model introductions to get them right.

GM, FORD, CHRYSLER AND THE UAW
These groups, particularly the UAW are loading their guns and aiming for their feet again.  If the UAW doesn't start getting a lot smarter about how it behaves vis-a-vis it's members' big US auto maker employers, it will go the way of the buggy whip--obsolete except for creating trouble.  Worsening this problem is the continued entry into the US of plants owned and operated by Japanese, Korean and a few European auto companies.   A lot of Americans will still be employed making cars, they just won't have a big, dumb, greedy union taking money from them for killing their jobs/employers.  This would be a fitting fate except for the hundreds of thousands of lives affected--some blameless, and some who are (and have been ) very much to blame for wanting more "than the market would bear" for their services.

AUTO INDUSTRY--WAY TOO MANY MODELS VYING FOR SALES--COMPLEXITY STRIKES!
The automobile industry is cruising for a crash--and a big one.  In case you haven't noticed, the number of new auto badges and models is growing like crazy.  There were too many just a few years ago, and number continues to climb.  In 2006 the CONSUMER REPORTS Auto Issue needed 38 pages to show its "thumbnail comments" on each auto model (and this didn't include model variants).  In 2007, the magazine changed to a two-column layout allocating half the space to each model and still took 29 pages  If it had been done in the old format it would have been 58 pages,  a whopping 50% increase in models listed in one year. 

While this may be a crude way of measuring model proliferation, run any test you want.  The number of models is growing much, much faster than the market, and that spells trouble.  A big shakeout is coming, and it is coming soon--in the next 2-4 years.  The sheer complexity added by these many models will continue to destroy profits, until "nature takes its course" and the fittest survive, the weakest cease to exist.   You read it here.  Watch it happen over the next few years.  First unnecessary and weak selling models start to fail and are "closed out," then companies that made them fail and are simply "closed."  By 2010, the auto industry will start to look very different.  Complexity takes its toll--insidiously but insistently.

Best, John

THE ENTERPRISE--Retirement?

THE ENTERPRISE

RETIREMENT?
This edition will be a day late since I've been in Florida for a little R & R.  You can't go to Florida without thinking about retirement and retirees.  Thus, I decided to make that the topic of this edition of THE ENTERPRISE (largely written while sitting at a Starbucks near Sandestin, FL.)

I am often asked if I am retired.  My answer is "nope, not yet," and I probably won't ever be completely "retired," as long as my mind and body will cooperate. The answer I've heard to the question about retirement was someone who said,  "Why should I stop doing what I love to do?"  In my case, I'm not that good at golf.   Wear and tear on my knees and neck (spine) precludes the more vigorous sports like basketball, softball, tennis, etc. except on an occasional basis.  I hate fishing and hunting--tried both before.  I am fully qualified as a "couch potato,"  but that seems to be less than a satisfying outlet for intellectual energy, and certainly doesn't help with physical fitness.

WHAT TO DO?
What does that leave?  Bicycling and walking are both great outlets that make me more fit and give me still more time to think.   And I can do either (or both) alone or with my wife...and others.   Travel to interesting places, while it can be expensive, is also great fun.  And then there are the children and grandchildren's activities, which are also great fun.  Movies, sports and "documentaries" (Like the Discovery Channel's Planet Earth) are great too, especially on a big screen High Definition TV.  Then come my great loves, writing, reading, and music.  I may even go back to painting (watercolor pictures, not walls) or even resuming my quest to learn how to play the piano and make recognizable music.  (My father was a great professional musician--there must be some musical genes in me somewhere!:-)

I'M NOT VERY RETIRED, OR RETIRING!
Thus, with four sizable company boards and two small ones, plus a couple of clients for advisory help, and a new book (still) at the publisher, I guess I am not very retired.   I'd enjoy another board spot, if it was the right kind of company.  But, I am also thinking about the economics of when I must live off my accumulated assets, Pensions and Social Security.  So should you—whatever your age and financial situation.

HOW ARE YOU THINKING ABOUT RETIREMENT?
With that preamble, what are you thinking of retirement as meaning to you?  Is it an elusive goal; a mirage?  Is the term an obsolete artifact of an era when work was so debilitating that people were "used up" physically, if not mentally, by the time they reached their fifties and sixties?  Nowadays, many say that people aged 65 are more like 50-year-olds of a few decades ago.  And soon, we will have more 65-year-olds than you can imagine.  We are facing an era when the greatest population surge in our country's history is just starting.  For the next 20+ years, about 4 million+/- people will turn 60 and grapple with the questions I pondered in the first three paragraphs.

WHAT ARE "WE" FACING?
As this wave of "baby boomers" move into their "retirement years," will Social Security have enough money, and will Medicare stay solvent?   The answers for the next 25 years are "probably Yes" and "probably Not."  The bigger question is, "How are you providing for your retirement years?"  Or are you, at all?

STATISTICS
Just in case you are wondering if you are better or worse off than average, and whether you will be ready for retirement (the "end of earned income" is perhaps a better way to describe it).  Consider these stats:
--63% of Americans aged 50-59 said they were concerned about not having enough money in retirement.  That's a high percentage.
--1/3 of workers aged 55 and over have less than $25,000 set aside for retirement.  That's scary.
--1/3 of workers aged 45 and over are not saving anything for retirement.  That's even scarier, because they still have time to accumulate a retirement nest egg.
--Health care costs are a huge issue:  the Employment Benefit Research Institute (EBRI) estimated that a couple retiring in 2006 and living to normal life expectancy would need $295,000 to cover post-retirement health care costs and premiums for insurance (not including Long Term Care Insurance).
--The average cost of an assisted-living retirement center is now $35,000/year, and since that's an average, some places are much more expensive.
--Nursing home care can easily cost over $75,000/year, not including medical costs.

AGE MATTERS, BUT NO MATTER YOUR AGE, WHAT ARE YOU DOING?
Compound interest is a wonderful thing, if only you set aside some money and invest it wisely, then keep adding to it as it grows.  The government has provided several tax-protected ways for you to set money aside:  IRAs (Individual Retirement Accounts) and 401(k)s (employer sponsored retirement funds) are the two most common.  Putting money into them is easy, painless and efficient, since it comes out of your "pre-tax" income, and can usually be deducted from your paycheck and direct deposited by an employer.    If your employer offers a "match" on the 401(k) fund, maximize your congtributions up to the amount the employer matches.  (e.g., Many employers will either match 1/2 or more of what you set aside up to about 5% of your earnings.)  Take advantage of this--it's 'free money."

INVEST WISELY--BUT DON'T THINK YOU CAN "OUTGUESS THE MARKET"--YOU CAN'T
You will have to make investment decisions on where to invest the money, but the only advice I have is don't invest it in the stock of your employer.    You already depend on the employer for your income, and probably have some other benefits tied into employment, so a different investment will diversify your risk.  If you are younger (under 40) you can afford going into a higher risk investment like a "Growth Mutual Fund" (example Vanguard Primecap or Capital Opportunity) a broad market Index fund (Most fund companies offer Total Stock Market index funds)   If you are over 40, I'd suggest using a "Balanced Fund"  (Vanguard Wellington is a good example) which won't pay as much on the upside but will protect the downside.  Bonds are safe, but historical returns are considerably lower than stocks.  (And don't bury the money in the backyard, because inflation will make it worth lots less when you dig it up to spend it.)

RETIREMENT PLANNING   
I am not a retirement planner, nor a financial planner.   I know a couple of people who are, and I have recently been going through such a process.  There are a few important questions you need to answer as part of the process.
---How much is enough—i total accumulated assets and annual living expenses those assets will fund?  If you don't know, now it the time to figure it out, regardless of whether you are 35, 45, 55, or 65.
---How fast can you withdraw money to live on and how will that deplete your accumulated wealth?  (and what are the tax implications of how you do it?)  This is a critical determination to make.
---What assumptions are your plans based upon?  What inflation rate to assume for living expenses?  ---What investment returns have you assumed for your assets?  How long will you live, and how long do your funds have to last?
---Where to find help?  There are lots of places, and multiple levels of help depending on how much you need, and what level of expertise you can afford.
(For those in Columbus/Central OH or the Greater Cleveland/Akron/Canton, OH Areas, I can make a couple of good recommendations--just email me and ask.)

DON'T GET LOOSE WITH RETIREMENT MONEY--KIDS CAN ALWAYS USE IT--BUT IT'S HARD TO REPLACE
A couple of thoughts as you consider these issues.  It is always tempting to "help the kids," but proceed with caution. Their need ... or your love for them...  might cloud your judgement about the economics of such a decision.  Unless the kids are willing to accept the financial responsibility for you in your later years, first make sure you have "enough," before you start passing it out for their needs, or (worse) for their "wishes and wants."

A WHOLE GENERATION OF AMERICANS MOVING ON--LARGELY UNDER-FUNDED
This is the greatest wave of demographics our country has ever seem, moving out of the productive, job-holding parts of its life and into a resource consuming part the its life.  Companies will be shocked once it hits them.  The loss of legacy knowledge will be huge.  The loss of skills will be great.  And too few companies think of it this way.  Rather they view it as a convenient way to "down-size" and cut payroll costs.  But that sword has two edges and can cut deeply.

A HUGE LEGISLATIVE AND ENTITLEMENTS ISSUE
This sea change of demographics is also an issue for government. The Federal Government is facing a marginal funding status in Social Security (probably OK until 2035-2040+/-) but with far too few workers paying into a fund for the number of retirees drawing from  the fund.  When you do your retirement plans, assume that Social Security will still be around, but that the retirement age must go up, benefits will likely be reduced, and offsets for "means" (wealth/earnings) will be more common.  Medicare is worse off.  It is inadequately funded, and will faces disaster in just a decade or two.  Premium costs will jump a lot.  Coverages will be reduced, too.  Beware:  those covered by Government Pension plans are also at risk, as many of them are also under-funded.

A BIG ISSUE FOR EMPLOYERS, TOO
Employers have noticed all of these issues; the more perceptive ones see the magnitude and are rightly concerned.   Most pension plans are moving or have already moved from defined benefit  plans (a guaranteed amount of money per time period) to defined contribution plans (the company will set aside a fixed amount of money...and it just will "cover what it covers").  Many pension plans are being cut entirely, replaced by 401(k) plans which are largely funded by the employee's own earnings and contributions, with a small matching portion from the company.  Retiree  health care insurance plans are being cut even more often and eliminated in most cases.  The era of "cradle to grave" economic security on the company's money is over.

FAILING TO PLAN = PLANNING TO FAIL
Regardless of your age, you MUST start planning now.  Use any of the many retirement planning systems or planners, or even a simplistic set of rules.  For example, here is a simple set of rules: 1) you will need at least 75% of your current earnings as retirement income; 2) calculate what that is in $/year; 3) multiply that amount times 20—that is THE LEAST you should consider having put away for retirement when you retire.  4) Subtract what you have set aside now.  The difference is how much you must accumulate over the remaining years between your current age and the age at which you hope to retire.  5) Divide by that number of years, and see how much you must save per year to get to your 20X number.  I bet it's a lot bigger number than you expected. 
NOTE:  The calculations behind this simplistic approach sort of ignore inflation and also ignore the compound earnings on your savings and assets—by assuming they'll balance each other out.  it isn't precise, but it's a good, conservative place to start.  You can refine it by using those "calculators" from the Internet to do the math more rigorously.  Just Google "Retirement calculator" and check a few.  But remember, if you want something to live on when you are older and no longer earning, you must save it when you are younger and earning/--there is no "magic" to this; just common sense.

START NOW, NO MATTER HOW YOUNG OR OLD YOU ARE
Most of those reading this know almost everything in it.  A few will find some interesting things they may have forgotten.  No matter.  If only one or two people get the message and it helps them, this will have been worth it.  After all, if you work most of your life, wouldn't it be nice to be able to enjoy your "golden years" at a decent standard of living?  I think so.

Best, John