9 Key Facts About the Upcoming Retirement Crisis in America

Retirement Fund picWe have a major retirement crisis on our hands; and it will affect all of us…eventually.

Unless we get serious and do something about it now, we are very quickly heading into a massive retirement crisis. And it is not just for the huge aging Boomer generation, but for generations to come. It has to be fixed, but our leaders are intent on making it worse.

Two thirds of working Americans will not be able to maintain their standard of living when they retire, sending many into poverty or near poverty. And none of it is our fault. Millions of Boomers, Gen Xers and on have not been able to save for the future. Pensions have disappeared. Wages have been flat. Healthcare costs have spiraled. Private plans like 401Ks and 403 Bs haven’t kept up. There have been recessions, waves of high inflation and unemployment.

So, Social Security and other benefits have to be fixed and expanded. The frustrating part is that it is all easily fixable. But the political establishment is hard at work to make it worse, by cutting benefits, not expanding them.

Warren addresses supporters during her victory rally in BostonHowever, Senator Elizabeth Warren has already taken up the fight for us. In a recent address to the Senate she said the following:

“Social Security isn’t the answer to all of our retirement problems.  We need to find ways to tackle the financial squeeze that is crushing our families.  We need to help families start saving again.  We need to make sure that more workers have access to better pensions.  But in the meantime – so long as these problems continue to exist and so long as we are in the midst of a real and growing retirement crisis – a crisis that is shaking the foundations of what was once a vibrant and secure middle class – the absolute last thing we should be doing is talking about cutting back on Social Security.

“The absolute last thing we should do in 2013 – at the very moment that Social Security has become the principal lifeline for millions of our seniors — is allow the program to begin to be dismantled inch by inch.

“Over the past generation, working families have been hacked at, chipped, and hammered.  If we want a real middle class — a middle class that continues to serve as the backbone of our country — then we must take the retirement crisis seriously.  Seniors have worked their entire lives and have paid into the system, but right now, more people than ever are on the edge of financial disaster once they retire — and the numbers continue to get worse.

“That is why we should be talking about expanding Social Security benefits — not cutting them. Senator Harkin from Iowa, Senator Begich from Alaska, Senator Sanders from Vermont, and others have been pushing hard in that direction.  Social Security is incredibly effective, it is incredibly popular, and the calls for strengthening it are growing louder every day.”

Here are 9 key facts about the upcoming retirement crisis to keep in mind:

  • Americans over age 65 are projected to increase from 14 percent of the current population to about 21 percent of the population by 2035.
  • The Social Security Trust Fund had a surplus of $2.54 trillion in it at the end of 2011, and is projected to be solvent until 2033.
  • Though most people don’t know it, Congress has cut Social Security payments by 24 percent since 1983, via delayed cost of living increases and higher taxes.
  • One-third of seniors live only on SS benefits, which is an average only $1,274 a month per retiree.  For two-thirds of retirees, the Social Security benefit is more than half of what they live on.
  • The wealth gap is skewed extraordinarily by race. For every dollar a white person has in savings, a Latino person has only 6 cents and a black person has only 5 cents.
  • Gender is a huge issue: Seven out of 10 seniors living under 125 percent of the federal poverty line ($14,360) are women.
  • Social Security is also the largest federal government program helping children, with 6.5 million recipients, totaling 8 eight of every 100 children in the U.S. in 2012.
  • Many people also don’t realize that no social security taxes are paid on incomes over $117,000—so the wealthy get off very easily. Slightly raising Social Security payroll taxes would more than cover and sustain the expansion of Social Security.
  • Huge numbers of Americans support Social Security reforms, with 87 percent of the population in favor of scrapping the $117k cap and 82 percent in favor of slight Social Security tax increases.

Why do wealthy power brokers want to cut social security taxes when they grossly underpay social security taxes themselves? That is the question at hand. There is no other issue in America where those in power are so out of synch with the voters and the people.

A series of simple, fair minded fixes would not just make Social Security solvent for decades, but would allow us to expand the benefits so no American falls into poverty as they age. That is a worthy goal for all of us, don’t you think?

[ Source: AlterNet.org | Don Hazen ]

[ Source: Washingtonpost.com | The Plum Line | Greg Sargent ]

[ Image Credit: Dreamstime.com ]