*Nervous times for baby boomers

Anyone born between 1946 and 1964 needn't be reminded of how little they're making on their savings. With interest rates on many products running in the 1 percent to 2 percent range, boomers have discovered that their nest eggs aren't large enough to ensure that they'll have enough money for retirement. Up until recently, this hadn't been a huge concern because everyone assumed that sooner or later rates would start heading upward. But they haven't, and each month that goes by is a little less opportunity to boost up the retirement pot. It's not just a baby boomer problem - if retirees are forced to scrimp, it means that they won't be able to spend - and that's bad for the economy. From the WSJ:

Low yields present retirees with a difficult choice: Accept the lower income offered by safer bonds, or take the risk of staying in the stock market. Either way, their predicament could put a long-term damper on the consumer spending that typically drives U.S. growth. "If these rates stay as low as they are, then a lot more people are going to be hurting," says Jack Van Derhei, research director at the Employee Benefit Research Institute. The non-partisan outfit estimates that if current conditions persist, nearly three in five baby boomers will be at risk of running short of money in retirement. "There are going to be many luxury items that will simply have to be eliminated," for retirees to make ends meet.

*Despite the latest concerns being raised about the financial health of Social Security, NYT columnist Paul Krugman says that the naysayers' math doesn't add up.

Legally, Social Security has its own, dedicated funding, via the payroll tax ("FICA" on your pay statement). But it's also part of the broader federal budget. This dual accounting means that there are two ways Social Security could face financial problems. First, that dedicated funding could prove inadequate, forcing the program either to cut benefits or to turn to Congress for aid. Second, Social Security costs could prove unsupportable for the federal budget as a whole. But neither of these potential problems is a clear and present danger. Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won't have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program's actuaries don't expect to happen until 2037 -- and there's a significant chance, according to their estimates, that that day will never come.