LENOX

For the upper crust of Berkshire residents who have at least $1 million squirreled away, their retirement address can be found on Easy Street.

Or so you might think. But here's a cold-shower reality check, courtesy of a study from the Center for Retirement Research at Boston College.

Given the volatility of the stock market where investors have been riding high until the recent downdraft, along with rock-bottom rates that make a mockery of interest from savings, even millionaires face the likelihood of belt-tightening austerity.

That's especially true in light of recent Social Security Administration projections showing that, on average, a 65-year-old male will live to be 84, while a woman of the same age would make it to 86.

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Obviously, millionaires aren't a dime a dozen outside the golden pastures of suburbs like Fairfield County, Connecticut, and areas just west of Boston. In Berkshire County, the median household income is just below $49,000 a year, compared to the statewide figure of $66,000, according to the 2010 U.S. census.

Besides, a million dollar nest egg 60 years ago, when "How to Marry a Millionaire" was a movie theater hit, has lost 87 percent of its value because of inflation. To put it another way, the Boston College study found it takes $8.7 million today to buy what $1 million bought in 1953.

"We're facing a crisis right now, and it's going to get worse," said Alicia Munnell, director of the Boston College retirement research center, in a New York Times interview. "Most people haven't saved nearly enough, not even people who have put away $1 million."

Since workers approaching retirement age usually consider the stock market too risky, they tend to sock away their 401K savings or pensions (the few who have them) in bonds. But bond prices are in free fall since interest rates are poised to rise and that means the face value of a bond declines proportionately.

A 65-year old couple with $1 million faces a 72 percent risk of running out of savings before they die if they withdraw 4 percent of their nest egg, or $40,000, each year. Many retirement specialists now advocate only 2 or 3 percent annual withdrawals from savings, a pittance for most people.

Forget about the rare birds with a million or more in the bank. A New York University economics department study came up with the startling revelation that the median net worth of a U.S. household is currently -- are you ready? -- only $10,880, not including real estate.

That's where Social Security comes in. Depending on when they start taking benefits and on their lifetime earnings in the workforce, individual retirees' average monthly payout ranges from $1,500 to $3,000.

To preserve benefits at the current level, the cap on Social Security taxes needs to be raised. Currently, earners pay the so-called FICA tax only on $113,700 in earnings. Additional income beyond that is exempted, meaning the greatest burden is on lower and middle-class households.

It behooves employees, whether they work for companies or for themselves, to remain at their jobs as long as possible, assuming they are in decent health and that they are not forced out of the workplace.

Even those who wait until their full Social Security retirement age of 66 can benefit from waiting to collect, since their monthly Social Security benefits rise by 8 percent for each year they delay, up to age 70. People who begin taking benefits at 62 face much-reduced payouts for the rest of their lives, though in this economy many prematurely retired folks have no choice but to do so.

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Then there's the grim prospect of inflation eating away at the value of whatever income retirees are able to cobble together. Day-to-day expenses for food and fuel are not included in the government's measurement of "core inflation" -- go figure! -- but everyone knows that the price of staples such as eggs, milk and bread have been going through the roof.

Some respected economists suggest that the rate of inflation, currently just below 2 percent, be allowed to rise to 4 or even 6 percent. That's a preposterous proposal, since it would hurt the most those people who can afford it the least. It would also stifle demand for goods, already at low ebb, and that would nip in the bud the still-sluggish economic recovery.

No wonder economics holds the dubious distinction of being dubbed the "dismal science." Since politicians and economists don't reside in the real world as experienced by everyday Americans, it's not surprising that cynicism and disgust aimed at Washington and Wall Street are reaching epidemic levels.

To contact Clarence Fanto: cfanto@yahoo.com