WHAT ARE THEY THINKING? GENERATION X IS LAST TO CONSIDER HOW SOCIAL SECURITY AND FINANCIAL PLANNING WILL AFFECT THEIR FUTURES.

Byline: Barbara Correa Staff Writer

Chris Garlington is worried about retirement. He's been depositing money in a Roth IRA for years and has a 401(k) and other retirement benefit options through work. But he's concerned that his savings won't be near enough, especially with the dwindling ability of Social Security to pick up the slack.

Garlington is 22. His peers think he's nuts.

``I wish more of my friends would (take control of their retirement),'' said Garlington, a business student at California State University, Northridge, and an intern at NASA's Jet Propulsion Laboratory in Pasadena. ``I am constantly looking for ways to ensure that I can retire comfortably,'' he said. ``I try to think of the worst-case scenario.''

Garlington could serve as the poster child for financial planners, Generation X advocates and the Social Security Administration itself, which in May launched its first campaign to get the word out that Social Security was never meant to be the sole source of income in retirement.

The problem is, younger people like him planning seriously for the future are in the slim minority.

``These are not sexy issues,'' said Rich Thau, president of Third Millennium, a nonpartisan Gen-X advocacy group. ``Social Security is viewed by a lot of young adults as fiscal toxic waste - they write it off.''

The irony is that post-baby boomers believe they can't count on the Social Security safety net. But instead of that issue mobilizing them as a group to fight for reform, cynicism has settled into an apathy that befuddles the politically active.

``It's pretty amazing that something like endangered sea turtles will get Gen-Xers into the street quicker than their own retirement,'' said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights and, at 36 years old, a self-described member of Generation X. ``This hasn't gotten under their skin.''

Doomsayer data suggests that it should.

Just 16 years from now, the Social Security fund will start taking in less than it is paying out.

Without reform, someone who is 35 now will see their Social Security benefits reduced by about one-third starting at age 74, and that's assuming payroll withdrawals remain steady. The benefits could continue to dwindle every year thereafter, according to the Social Security Administration. Today's 25-year-old worker would see that one-third loss sooner, at age 64.

Based on current Social Security calculations, a 37-year-old worker expecting to earn $50,000 a year until retiring at age 67 would get about $1,600 a month. But short of reform, that would drop by about $500 a month at age 74, and would continue to decline after that.

Taken with other trends in retirement savings, the situation begins to look more dire.

A survey of 401(k) plan sponsors found that employee participation in the retirement savings accounts dropped last year for the first time since 1991. Last year, 73 percent of employees contributed to their 401(k) plans, down from 79 percent in 1995, the Buck Consultants survey found.

The main reason for the decline is negative returns in the markets, but it also has to do with more companies cutting back on matching contribution plans in the last year, said Rich Koski, a principal and 401(k) expert at Buck Consultants.

A lot of employees are throwing up their hands and focusing on more immediate concerns.

``There is so much job insecurity and people are so worried about that, the last thing they're really focusing on is long-term retirement.''

It's your money

In a bid to bring the issue home to workers, the Social Security Administration quietly began sending out benefits statements several years ago to every worker over 25.

``For younger people it's really hard to break through to them. They don't think they're going to get old and they're not planning,'' said Mariana Gitomer, spokeswoman for the administration's Los Angeles office. ``But the statement has been a great tool to open people's eyes. ... What I tell people is, you have 7.2 percent deducted from your paycheck (in Social Security taxes). You should get involved.''

Reforms on the table include raising the ratio of benefits that are taxable from 85 percent currently, raising the retirement age and establishing individual tax-free social security accounts.

It's anyone's guess when a viable package might become law. But last month's passage of a $400 billion Medicare prescription drug benefit lends hope that reform won't take forever.

Groups like Third Millennium urged supporters to lobby against that bill, claiming it will end up costing post baby boomers more than Social Security.

The passage of the Medicare bill, which cut an amendment from Sen. Dianne Feinstein calling for higher-income recipients to pay a higher rate, is a good example of how younger workers are being cut out of important policy debates by their own apathy.

``You have this cycle where some generations become the indentured servants of other, older generations and they do it unwittingly,'' said Thau. ``If you stopped people in their 20s and 30s and asked them what they thought about Social Security reform, they'd be clueless.''

Indeed, the notoriously nonvoting Generation X isn't likely to form its own version of AARP anytime soon.

The good news

But there are reasons for optimism.

U.S. personal savings rates, as a percentage of disposable income, have started to rise again. A decade ago, personal savings were 7.1 percent of income. By 2001, the rate was down to 2.3 percent, but rose to 3.7 percent last year, according to the Bureau of Economic Statistics.

And at some point, younger workers will get engaged politically. ``I think people will start rallying,'' said Thau.

Until then, there are people like Rob Shelton, a 26-year-old Ontario real estate analyst who's been faithfully depositing 15 percent of his salary into a savings account for the last three years.

``More than ever, I'm thinking long term about retirement,'' he said, adding that most people his age have an eat, drink and be merry attitude about saving for the future.

Uncertainty about employer solvency, corporate scandals and terrorism are adding to the sense that life may be fleeting and what's happening 20 or 30 years down the line isn't important now, he said. ``I don't think it's denial. It's involuntary ignorance. ... What's cool now is having toys, that's your status. It's not about what you have in your bank account.''

His approach to retirement sets him apart from the status quo. ``I have to look at this differently because my dream has been to have a family and to give my wife the option to work,'' he said. ``It's hard to not buy things. But you just have to learn to prioritize.''

Barbara Correa, [phone]

barbara.correa(at)dailynews.com

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