Documentary spotlights looming retirement crisis

Robert & Rhonda Kamphey bet their home on their business - and are suffering the consequences.

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(FORTUNE Small Business) -- Until the mid-1960s, the elderly made up the largest population of Americans living below the poverty line. The economic trinity of Medicare, Social Security and corporate pensions stopped that insidious trend and brought financial security to millions of people beyond their wage-earning years - but today, that infrastructure is under attack, leaving many workers and entrepreneurs nervous about how they'll afford to eventually stop working.

Retirement Revolution, a two-part documentary premiering Monday on public television stations throughout the U.S., explores the fraught topic of the impending Baby Boomer retirement wave. At odds with the government's call for greater consumption to stimulate the stagnant economy, the film's message is that Americans need to learn to stop spending and save for the future.

"We set out to create an educational film, to inform people," said Fran Harth, the film's executive producer. "We wanted to say even if you're 50 or 60, it's not too late."

Created for the Public Broadcasting Service (PBS) by Chicago-based television producer WTTW National Productions, Retirement Revolution offers both a historical overview of care systems for the elderly and a primer on the steps Americans need to take to safeguard their own financial futures. Interwoven throughout are the stories of a cross-section of middle-class Americans - some instructive, some tragic.

Take Robert and Rhonda Kamphey of Palm Harbor, Fla., two entrepreneurs struggling with the aftermath of a business meltdown. As the Kampheys' plastic molding and tool making company lost business to Chinese manufacturing, they cashed in their IRAs, dissolved their portfolios and sold stocks. Having refinanced their house and business - which went into Chapter 13 bankruptcy - they worry that they will have nothing left in their later years.

Other individuals profiled in Retirement Revolution have their nests comfortable feathered, such as Donald Michelin, a recently retired former school principal in Evanston, Il., who enjoys a generous pension of $72,000 a year, allowing him and his wife to save all of her $44,000 salary.

Retirement Revolution's hour-long first episode, airing this week, explores the history of retirement economics, from the poorhouses of the late 19th century straight through to the Pension Protection Act of 2006. It pays particular attention to how in recent decades, guaranteed-benefit corporate pension plans have been supplanted by private savings plans such as 401(k), for which the average savings rate is quite low - on average, less than of 4% of income, according to one financial planner quoted in the documentary.

Meanwhile, dire predictions swirl around Social Security and Medicare, both of which will become underfunded within decades as the Baby Boomer population that once provided the financing starts to claim its benefits.

Retirement Revolution's second episode, which airs Monday, April 7, delves into financial education. An array of experts provide accessible, detailed explanations of reverse mortgages, the differences between whole and term life insurance, Roth IRAs vs. traditional IRAs, how disability insurance works, and other essential elements of a modern personal-finance foundation. They also offer warnings about the perils of IRA penalties for early or late withdrawals and the cost of breaking into your 401(k) savings.

"Tax sheltered money is like an eggshell: you break it, it's over. It's taxable. All that tax comes out," says CPA Ed Slott, an IRA specialist. He advises that when you leave your job or retire and receive your 401(k) investment as a lump sum, the best thing you can do is roll it over into other funds - without seeing or touching it.

Many of the film's pundits sound the klaxon about America's spending addiction.

"There are people in their 50s who are pulling money out [of their 401(k)] and redoing the house. That's insanity," says David Bach, author of numerous financial self-help books. "You should really be looking at the money you put away in a retirement account as your emergency retirement savings plan."

Personal finance writer Terry Savage thinks drastic changes are needed: "We have to change the national mentality from 'I see it, I want it, charge it, borrow it, suck the equity out of our homes.'"

One optimistic trend spotlighted in the documentary is the number of entrepreneurial ventures launching to cater to a new, more active generation of retirees. There's Beacon Hill Village, an organization in Boston created by members who decided to build the retirement community they wanted, with care and shopping services available on request in their own homes.

And there's Experience Corps and Civic Ventures, organizations that work to promote the talent and skills of older business veterans such as Gary Maxworthy, who created a program to distribute non-market-standard fresh produce to California's poor.

While Retirement Revolution's storytelling is sometimes strained, awkwardly trying to balance theory, history and personal narratives, the film does succeed in conveying the urgency of developing a personal strategy for financing your later years - and of the scale of the looming fiscal quandary. The first of the Baby Boomers are slated to start receiving Social Security retirement checks this year. Over the next two decades, 78 million more wait in the wings.