We are on the verge of a retirement crisis, something pretty much everyone knows except, apparently, people campaigning for president. Private savings schemes have not worked out for the vast majority of us. Very few have six figures saved in our 401(k)s, something that is unlikely to change any time soon since about half of us are living paycheck to paycheck, unable to save for an emergency that could happen tomorrow, never mind an event twenty years off. Pensions are rapidly becoming a thing of the past. Stock market returns have been anemic for more than a decade, compounding the problem since even those who have saved money are not seeing the returns on it that financial advisers and the like assured them would occur. As for interest rates …well, let’s not go there.
Social Security has kept millions of elderly men and women out of poverty. According to the Census Bureau, more than 20 million of us would live in penury if not for the program. Yet Washington deficit hawks are fond of bashing Social Security as a major source of our budgetary woes. Solves are recommended such as raising the retirement age to 67, in line with rising lifespan, and turning some portion of our Social Security funds over to Wall Street, a position that is about as popular with the American public as paroling Charles Manson.
Mitt Romney has made vague statements of support in the past for allowing the financial services sector to have a role in our Social Security accounts. His running mate, Paul Ryan, is an out-and-out cheerleader for the concept, and was a big backer of President George W. Bush’s plan to partially privatize Social Security by allowing people to divert some of their mandated contributions into personal investment accounts. All of this should have been said by Barack Obama last night. Inexplicably, it was not.
The fact is even as more and more Americans express a willingness to work longer than in the past if needed, no one has proven the jobs will be there for them to do just that. Nor is our longer, healthier life span a guarantee. A study published last summer documented that for white men and women without a college diploma, life expectancy had declined by three and five years respectively between 1990 and 2008. Others have found that Baby Boomers are less healthy than their parents at the same age, which might well be one of the factors behind the increasing numbers of Americans applying for disability coverage.
Not surprisingly, survey after survey shows that about eighty percent of us are absolutely petrified about how we will get by after our working lives end. It’s likely that every time someone tells us they plan to “tweak” Social Security, like President Obama did last night, that number goes higher.