Worrying statistics about American's retirement future - Politics Forum.org | PoFo

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#15283523
The below is evidence that there's going to be a widespread crisis in the future when the current working-age generation of Americans moves into their retirement years.

In America today, 55% of seniors are trying to survive on less than $25,000 a year.

Only 1 in 10 low-income workers between the ages of 51 and 64 had a retirement account balance in 2019, compared to 1 in 5 in 2007, according to a July report from the Government Accountability Office. (about 15% of the U.S. population are considered to be in low income households)

(source: 'Millions of Americans are retiring with no savings': Report reveals about 90% of lower-income US workers over 50 have nothing stashed away for retirement -- here's how to catch up, Serah Louis, Moneywise )

26% of non-retired Americans have no retirement savings.

As of September 2022, most people only got an average of $1,547 per month for Social Security, which is only a little more $18,500 a year.

In one survey, 61% of older middle aged Americans said they are more afraid of running out of money than they are of death.

The average age of retirement for Americans is 66, according to a Gallup poll, which is up from age 60 in the 1990s.

Of the 47.8 million Americans ages 65 and older, the average income is only $38,515, according to the U.S. Census, and their average net worth is $170,516.

46% of Americans between the ages of 40 to 49 have pulled money out from their retirement plan before retirement. (Pulling money out of a retirement plan prematurely often comes with financial tax penalties so usually financial planners advise against this)
#15283556
@Puffer Fish, PF, these problems are the direct result of Gov. policies under Neo-liberalism. The main ones are that the laws giving Unions power to get wage increases were gutted, and the laws to keep the "Trusts" from returning were not enforced. BTW, this was a clear violation of the Constitution and the Presidents' oath of office to "faithfully execute the laws". All the Presidents from Reagan to maybe Biden followed this policy.
The results of these Gov. policies were that real wages were flat or even declined (depending on how the CPI is calculated) and that therefore, profits and rates of profits increased in most years. Increasing the rate of profits is particularly bad because no nation can keep doing this for long, because soon the workers can't afford to support a family, so women will not marry them, so women don't have kids, so the number of workers declines.
And, where did the money go? Into the bank accounts of the rich who can't spend or invest all their money, so it just sits there doing nothing (often the rich buy Gov. bonds).
The low wages also ate into the size of the Soc. Sec. Trust Fund, which I saw a report is about $1.3T less, because of the flat wages, IIRC. I thought it would have been more like $2T.
#15283561
Steve_American wrote:The main ones are that the laws giving Unions power to get wage increases were gutted, and the laws to keep the "Trusts" from returning were not enforced.

Steve_American, the main reason that unions got decimated had to do with immigration and changes to international trade agreement policies. (i.e. if the workers try to strike, hire someone poor and desperate from another country, or in another country)
It had very little to nothing to do with changes in the law directly relating to unions.

Unions getting decimated was just another symptom of the same underlying factors that led to decrease in wage levels, not the cause of the decrease in wage levels. It comes down to balance of supply & demand, and a reduction in the amount of leverage which labour could exert in the marketplace.
#15283562
Puffer Fish wrote:Steve_American, the main reason that unions got decimated had to do with immigration and changes to international trade agreement policies. (i.e. if the workers try to strike, hire someone poor and desperate from another country, or in another country)
It had very little to nothing to do with changes in the law directly relating to unions.

Unions getting decimated was just another symptom of the same underlying factors that led to a decrease in wage levels, not the cause of the decrease in wage levels. It comes down to balance of supply & demand, and a reduction in the amount of leverage which labour could exert in the marketplace.


Are you saying that in the 17 years from 1981 to 1998, before NAFTA, the labor laws were not gutted. Also, OK, I can just add that opening the American market to unfair competition from foreign workers was a 3rd cause of the flat or declining real wages.

I deny that immigrants would have held down wages if the Unions could have gone on strike to get higher wages for all workers in the Union. Please explain how I'm wrong that strong Unions could have still fought for and gotten higher wages, even if there were workers willing to work for less. There were always workers willing to work for less.
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#15283568
Also, because the Gov. with its policies allowed the rich to take income from the workers for 40 years, it would only be fair to increase the Soc. Sec payments by $200/mo. and or have a UBI that also gives income to the workers.
MMTers assert that the Gov's actions during covid prove that the Gov. does not need to tax the rich to do either or both of these. It can just spend the money, if necessary the Fed. can buy the bonds or don't sell them.

The rich may worry about inflation if the Gov. doesn't "pay for" these programs, so they have a choice, either let their taxes be increased to pay for these programs or see the inflation that they think will happen.

Of course, the rich can increase the prices their corps charge the workers to buy what they *need* to live, so the Gov. would also need to enact policies to stop this. Like a price freeze or an excess profits tax, etc.

Of course, this will be temporary, if only because climate change will overwhelm all predictions and Gov. policies in the next few to several years. Wait and see just how fast temps and problems will increase from now on. Exponential growth always becomes a wall unless it is stopped. But, the wall always stops it in any case.
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#15283589
Steve_American wrote:Please explain how I'm wrong that strong Unions could have still fought for and gotten higher wages, even if there were workers willing to work for less. There were always workers willing to work for less.

It's a simple matter of supply and demand. When workers have less leverage in the labour market, union strategies are going to be less effective. You'll notice that pretty much all unions in the private sector were completely decimated and the only ones left that still had any real influence were in government employment and public schools.
#15283611
Puffer Fish wrote:It's a simple matter of supply and demand. When workers have less leverage in the labour market, union strategies are going to be less effective. You'll notice that pretty much all unions in the private sector were completely decimated and the only ones left that still had any real influence were in government employment and public schools.


Lurkers, does really think that he can just make an assertion like Unios are weak now and you will believe that it is just how things are because of a simple thing like "supply and demand"?
Does he not know that corps were banned from hiring scabs before 1980. Does he think you will fall for such a worthless argument?
Does he not know that workers have skills that corps can't right away find in new hires.

He doesn't make arguments and he just makes assertions as if you will believe them because he said so, or it is common knowledge.

I argued that Unions are weak because the Gov. changed its policies on labor law enforcement. Yes, sometimes it was because of court decisions, but the Gov. can always pass new laws to get around decisions that are not based on the rights in the Constitution.
And new Judges and Justices can be put in the courts.
It is Gov. policies, period.
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#15283614
Puffer Fish wrote:
Steve_American, the main reason that unions got decimated had to do with immigration and changes to international trade agreement policies. (i.e. if the workers try to strike, hire someone poor and desperate from another country, or in another country)
It had very little to nothing to do with changes in the law directly relating to unions.

Unions getting decimated was just another symptom of the same underlying factors that led to decrease in wage levels, not the cause of the decrease in wage levels. It comes down to balance of supply & demand, and a reduction in the amount of leverage which labour could exert in the marketplace.



You just contradicted yourself.

It was supply and demand, and corrupt politics...

It wasn't immigration or trade. Trade did have an effect, but that happened a generation later.
#15296628
Generation X was born between 1965 and 1980, and this age group is getting closer to retirement.
This generation faces a "dismal retirement outlook", according to a recent report by the National Institute on Retirement Security (NIRS).

Dan Doonan, executive director of NIRS, says the vast majority of Generation X is "not even close to having enough savings to retire."
"This really isn't surprising given the terrible retirement hand that has been dealt to the latchkey generation. Most Gen Xers don't have a pension plan, they've lived through multiple economic crises, wages aren’t keeping up with inflation, and costs are rising. The American Dream of retirement is going to be a nightmare for too many Gen Xers."

The bottom half of workers in Generation X have put away just a few thousand dollars for retirement. Overall, a typical Gen X household has a measly $40,000 in retirement savings.
Most Gen X retirement wealth can be found in the coffers of a relatively small number of higher earners. Black and Hispanic Gen X earners have much lower rates of retirement savings than do earners who are white.

from the NIRS report:
"The youngest members of Generation X are at least two decades away from retirement. They still have time to improve their financial situation, but if current trends continue, many Gen Xers will experience a decline in their standard of living during retirement."​

As the Sun Sets on Gen X Careers, Dark Clouds Gather, Money Talks News, Chris Kissell, 11-25-2023


another related thread: Elderly falling into homelessness (posted 13 Sep 2023 in Economics & Capitalism)
#15296637
@Puffer Fish,
A part of the problem is the law for Soc. Sec, payments for 2 worker households.

Generally, the wife gets 2/3 of what her husband gets, or what she is entitled to from her wage history, whichever is more.

So, often all the money she paid into the SS trust fund in all of her working years adds not a dollar/mo. to their SS payments. If they get a divorce, IIRC, she still gets 2/3 of her ex's payments. If he dies, then she gets 100% of his payments. This was changed in the 70s or 80s from her original normal 2/3 of his payments.

Is this fair? Shouldn't she get something from her work and the payments she was forced to make?
________________________________._______________________________________

I also point out that keeping wages low also reduced the size of the FICA tax collections and so the size of the SS Trust Fund.
Low wages also reduced the workers total payments into the system which reduces their payments upon retirement.

I know you'll disagree with this, but a simple solution to SS problems is to supplement the Trust fund with dollars from the general budget. Or, to raise the limit on taxable income for the rich. Ot to tax income from capital gains. Or, to replace all the current bonds held by the Trust fund with new bonds that pay a lot more interest. If the rich can get free money for doing nothing, it is only fair that retired people also get additional money that is free, so they can live with dignity.

Of course, I'm ignoring the effects of climate change on the US economy.

BTW -- Peter Ziehan says that the US is going to have elevated inflation for the next couple of decades because it needs to build new factories to bring production back to the US or Mexico, and other effects of deglobalization. I have no idea if he is right. He doesn't accept MMT either. So, use of Gov. deficits per MMT can maybe reduce the inflation he predicts.

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#15296646
Steve_American wrote:@Puffer Fish,
A part of the problem is the law for Soc. Sec, payments for 2 worker households.
Generally, the wife gets 2/3 of what her husband gets, or what she is entitled to from her wage history, whichever is more.
So, often all the money she paid into the SS trust fund in all of her working years adds not a dollar/mo. to their SS payments. If they get a divorce, IIRC, she still gets 2/3 of her ex's payments. If he dies, then she gets 100% of his payments. This was changed in the 70s or 80s from her original normal 2/3 of his payments.
Is this fair? Shouldn't she get something from her work and the payments she was forced to make?

I don't understand what you are trying to say, and I suspect even you don't understand what you are talking about.
She does get something from her work if she earns more than her husband. If she earns less than her husband, she arguably gets money that is undeserved.

Like a typical Leftie progressive, it seems you want her to eat her cake and still have it too. I can't think of a point to your post unless you were trying to argue she should get her husband's money AND still get the extra money from her own.
Which would obviously be excessive and unfair.

In my personal opinion, I think maybe they should change it back, so she only gets 70% if he dies. Or she gets 100% but only counting his years that she was married to him. Whichever is more.

Because these days many women don't tend to stay married to the same man for very long, and may often get married two or three times in their life, or marriage may not even be something very important on their life, and they remain unmarried by choice for most of their life.

It's not really money you are "entitled to", because that implies that your family members should get that money if you die. It's more like an insurance plan or an annuity. It will pay you some money until you die. It's meant to help provide for people when they retire, if they are still alive.
#15296647
Steve_American wrote:I know you'll disagree with this, but a simple solution to SS problems is to supplement the Trust fund with dollars from the general budget.

Yes, that is a simple solution. Except the government doesn't have the money.
You should have thought of that before advocating to run up gargantuan debts. Too bad now.

(Please spare us your spiel about how government can print as much money as they want and it doesn't matter. I'll have that debate with you in another thread)

By the way, it's estimated it would require a 2% increase in the payroll tax just to keep this program sustainable without pay cuts.
(That might not sound like much but for several reasons it is a lot, because it will likely be on top of other future tax increases, and this is not even to go towards the general government budget but to go towards a smaller program)
#15296649
Puffer Fish wrote:I don't understand what you are trying to say, and I suspect even you don't understand what you are talking about.
She does get something from her work if she earns more than her husband. If she earns less than her husband, she arguably gets money that is undeserved.

Like a typical Leftie progressive, it seems you want her to eat her cake and still have it too. I can't think of a point to your post unless you were trying to argue she should get her husband's money AND still get the extra money from her own.
Which would obviously be excessive and unfair.


In my personal opinion, I think maybe they should change it back, so she only gets 70% if he dies. Or she gets 100% but only counting his years that she was married to him. Whichever is more.

Because these days many women don't tend to stay married to the same man for very long, and may often get married two or three times in their life, or marriage may not even be something very important on their life, and they remain unmarried by choice for most of their life.

It's not really money you are "entitled to", because that implies that your family members should get that money if you die. It's more like an insurance plan or an annuity. It will pay you some money until you die. It's meant to help provide for people when they retire, if they are still alive.


What I wrote was, "Is this fair? Shouldn't she get something from her work and the payments she was forced to make?"
. . . By something I thought it would be obvious I meant less than 100% of what she "earned". So, maybe 50% or 33% of what she would be "entitled to".

Are you aware that Soc. Sec. was started when most Mons stayed home and never had a job of their own? They got 2/3 of their husband's payment so they couple could survive.
. . . The law was changed in the 70s or 80s because the female survivor was being forced to live on less than half of what the couple got, and they fell into poverty as a result.

So, the system originally gave the husband enough to support his wife as payments to her. This was seen as money that he earned. She wasn't getting it, he was. Single men were the ones being screwed, it wasn't that the wives got money they were not "entitled to".

Yes, times have changed. Marriages don't last like they did in the 40s. I'm not sure what the law is about multiple divorces. So, I can't comment.
_________________________________________._____________________________

You seem to be complaining that the elderly are becoming homeless and that is a bad thing. If so, then I agree with you.

OTOH, you seem to want to cut SS payments, because the system can't afford to pay them. Do you realize that cutting them will make more homeless retired people?

With-all-due-respect, the US is one of the richest or maybe the richest nation at the present time. I totally reject the idea that it can't afford to keep its retired people out of poverty. This is why I say that IMHO the rich and corps are way undertaxed in America. It isn't that we spend too much (we spend too little incl. on maintaining our infrastructure), the problem is the rich are undertaxed.
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#15296727
Typical of discussion on economic issues is people seeking to resort to ideological debate and thus crowding out the actual issue.

The retirement savings situation is indeed abysmal. It is pretty easy to understand why if you live in the economy.

Stagnant wages and rising costs--i.e housing--are among the principle factors. The nitty gritty details of how this condition relative to several decades came about ago are numerous, are endlessly debatable, and in some respects don't really matter vis-a-vis the present state of affairs.

In any case it is essentially a regressive situation. In most times and places people do/have not enjoyed the security of robust and adequate retirement savings infrastructure. The establishment of such was a major achievement of advanced modern industrial societies. In the US there is a reversion to ruder and more destitute conditions in the realm of retirement as with many other realms.
#15296734
A lot of older folks didn't job hop. If they did, they would have seen big increases in salaries/wages. SS takes the highest salary you ever got and uses that to calculate your retirement benefit.

So if the highest salary ever earned was $46,000 then that's what is used in the calculation. If you job hop and end up earning $90,000 in your life, then the retirement benefit will be significantly higher.

Sadly, people don't think of this. It's scary and stressful to switch jobs, but it's totally worth it to get that raise in pay. I left my old job and my increase in pay is more than I could have gotten in 5 years. The raises I was getting were small, less than 5% each year.

Plus, a lot of people don't set aside money in a 401K. Just doing that could supplement their SS. I have some financial planner contacts and they said that many people do not contribute enough to their 401K. They think that they need more money to spend right away, rather than set aside a little bit each pay period for the future. It's important to put aside that money, even if it's just 5% or 3%.

Despite the rough economy, people are still spending on luxury items, vacations and other discretionary items. Instead, they should be setting aside that money for retirement and emergency funds. You never know when you might need to pay for a hospital visit.

And one other thing, some people may never be eligible for SS. You have to have 10 consecutive years of work experience. I know of a guy who has no SS because of this. I don't know what happened in his life. I dare not ask. It's a very personal thing. As long as your pay goes into FICA for 10 years, you're eligible.
#15296869
MistyTiger wrote:A lot of older folks didn't job hop. If they did, they would have seen big increases in salaries/wages. SS takes the highest salary you ever got and uses that to calculate your retirement benefit.

So if the highest salary ever earned was $46,000 then that's what is used in the calculation. If you job hop and end up earning $90,000 in your life, then the retirement benefit will be significantly higher.

Sadly, people don't think of this. It's scary and stressful to switch jobs, but it's totally worth it to get that raise in pay. I left my old job and my increase in pay is more than I could have gotten in 5 years. The raises I was getting were small, less than 5% each year.

Plus, a lot of people don't set aside money in a 401K. Just doing that could supplement their SS. I have some financial planner contacts and they said that many people do not contribute enough to their 401K. They think that they need more money to spend right away, rather than set aside a little bit each pay period for the future. It's important to put aside that money, even if it's just 5% or 3%.

Despite the rough economy, people are still spending on luxury items, vacations and other discretionary items. Instead, they should be setting aside that money for retirement and emergency funds. You never know when you might need to pay for a hospital visit.

And one other thing, some people may never be eligible for SS. You have to have 10 consecutive years of work experience. I know of a guy who has no SS because of this. I don't know what happened in his life. I dare not ask. It's a very personal thing. As long as your pay goes into FICA for 10 years, you're eligible.


Sorry, but that is wrong.

I googled "Hpw does SS calculate your benefit" and the 1st result was =>

How Social Security benefits are calculated
Social Security has two main criteria for whether you earn retirement benefits and how much they are if you do qualify:
You must earn a minimum number of credits to even qualify for retirement benefits.
Your retirement benefits depend on how much you’ve paid into the system over your 35 highest-earning years.
The calculation is complicated, but does not all depend on any one year. My reading of the formula is that no one year is special, what matters is how much you earned in each year.
#15296870
Crantag wrote:Typical of discussion on economic issues is people seeking to resort to ideological debate and thus crowding out the actual issue.

The retirement savings situation is indeed abysmal. It is pretty easy to understand why if you live in the economy.

Stagnant wages and rising costs--i.e housing--are among the principle factors. The nitty gritty details of how this condition relative to several decades came about ago are numerous, are endlessly debatable, and in some respects don't really matter vis-a-vis the present state of affairs.

In any case it is essentially a regressive situation. In most times and places people do/have not enjoyed the security of robust and adequate retirement savings infrastructure. The establishment of such was a major achievement of advanced modern industrial societies. In the US there is a reversion to ruder and more destitute conditions in the realm of retirement as with many other realms.


I agree 100%.

Also, the stagnate wages also reduced the amount of your benefit, because it is based on the amount you earned in the highest 35 years of your earnings adjusted for inflation.
They also reduced the amount in the SS Trust Fund.

assert that a Progressive Congress could choose to compensate the workers by increasing their benefit for the stagnate wages that were in great part allowed or caused by neoliberal Gov. policies. It could also just add to the SSTF some trillions of dollars or just pay (say)
50% of whatever you get from the general fund to keep SS solvent.
Crantag and I strongly disagree on just what the US Gov. can do in terms of deficit spending without causing inflation.
#15296924
@Puffer Fish

Why should companies pay people more than they absolutely have to?

Why should companies charge any less than the maximum possible?

If workers end up being paid so little that they cannot afford these maximum prices, they should have been born richer
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