Fixed income retirement plans are well on their way out as the norm for most Americans. Pension plans were an incentive to attract workers to manufacturing and public sector jobs 50 years ago. This is not to say they are a bad idea; it's better to say that executives and mutual fund companies have pitched a convincing argument to managers that these plans are a better way for workers to retire. Most new hires these days are put on some sort of 401k or IRA retirement plan in which the worker gradually buys stock in a dollar cost averaging scheme. This has worked out well over the last two generations as the stock market has generally gone up with significant returns. One major advantage is that generally, these plans give gains that outpace inflation so that a worker actually earns money on their investment over time.

However, we in the U.S. are still left with an enormous pension plan – Social Security. We have no choice but be enrolled, and the benefits we ostensibly will receive are based on the money we make during our working life. Furthermore, one reason private retirement plans are seeing success is because of the backstop effect social security has on our retirement mindset. How strong is that backstop though? Is it a net, a fence, a brick wall? Social security faces problems in the coming years – increased life span, longer retirements, and smaller percentage of the country's population working.

As far as increased life span, this column could go over statistic after statistic of how much longer Americans are living than 80 years ago. In 1930, the average age ofdeath was 60; now it is 78. This is nearly a generation longer life span. Better medical care and healthy consistent food supplies account for some of the increase; safer work environments and temperature control contribute greatly as well. The average has leveled off recently and we can probably be safe in saying that 75-80 is a safe guess for the average for many years to come.

Social Security could even be a motivation to live longer for some – you get the money as long as you are alive! What better motivation for a senior who doesn't spend all of the money they earn just by drawing in breath. And it's not as if the money just disappears when the person passes – inheritance is often a significant windfall for those in midlife. Basically, social security combined with private retirement plans earns profit for retirees.

The demographics of the baby boom are really starting to catch up with us though. This column from theWall Street Journal highlights how the recession has magnified problems that we already faced. The Labor Department's “employment to population ratio” has been modified and adjusted so much it no longer means what it should. To rephrase, I mean that what really matters is how many workers it takes to support non-workers. Looking at ages 16-54, we see how it looks like just a 4.7% drop in the working population. 4.7%; not that bad right? Let me show you how big a drop 4.7% really is

Subtract the % of workers from 100 and you get the % of non-workers, right? By dividing the number of non-workers by the workers, we get an actual ratio, which I have dubbed the 'support ratio”. This ratio shows how much of a “worker” it takes to support a non-worker. In 2007, the support ratio was .579. By 2013 it has jumped to .706. Thus, 12.7% more of our work goes to support those who aren't working now as compared to 2007. And the ratio itself has increased by 22% (the difference between .706 and .579, .127; then divided by the original .579) I would argue that the closer this number gets to 1, the greater trouble our retirement scheme of social security faces. At 1, it requires one person working just to support the non-worker. At that rate, savings are virtually gone and we begin facing all sorts of other societal problems.

There's still cause for good news. 76.1% of “prime” working age (25-54) folks have jobs. This is down only 3.9% from 2008. I would attribute these job losses to technological change in addition to the recession. Also, families have considered quality of life issues besides money, and have switched to lifestyles that have a parent at home to save childcare costs. We've found computer programs and statistics to increase productivity and target work where it is needed. However, what I would like to debate is whether 54 is a good age to end someone's “prime” career. Those above 60 are increasingly in good physical shape and health and can have at least a part time job. Why would we discount those who are able to work from statistics on employment? In fact, they are so healthy that I question whether the Fed uses this statistical trickery to make the picture look rosier than it is.

We saw the Department of Labor jobs report yesterday. 113,000 jobs added with an unemployment rate drop to 6.6% The numerator went up by a smaller than expected number, but the denominator went down much more, so the rate drops. This is why I advocate looking at a different number than the diluted and filtered unemployment rate. With such a glut of retirees on the horizon, we have to account for things differently.

I do not question whether we should be providing for seniors – this pension for some is their only income and allows them to pay minimal living expenses and stay independent. Younger families benefit from seniors being taken care of so that the “prime” workers may focus on work and their children. What I do question is the age at which people receive social security payments. When many people are living well past 90 and begin drawing social security at 67½, our society pays for one-fourth of that person's life. Especially because the trustfund has been borrowed against by Congress through inaction and the Treasury by law to pay for other obligations, it is in our best interest to reduce the amount leaving that fund.

Every day we hear talk of the bad economy, the recession, and what are we doing to solve the problem. Meanwhile, every day, workers are retiring with the guarantee for payments for the rest of their lives, regardless of their capability to work. Current workers spend one hour of every day paying for this support. It is only fair that we shore up the system we have in order to make sure that current workers can get the same benefit later in life. It may sound like I'm arguing for generational warfare. I am. Those who are now 67+ had the opportunity to fix these problems years ago. This problem has been acknowledged since the mid 80s; it's about time we fix it.