Mark Miller has a column over at Reuters, “Can expanding Social Security solve the retirement crisis?” which should make anyone reading it do a double take.
While I’m not going to endorse the group featured and their goals of expanding Social Security (at least not yet), I do support keeping Social Security strong and believe that there is a retirement crisis in this county that must be addressed collectively. If you don’t believe me, just consider the following pull quote:
…there’s a huge gap in retirement nest eggs. Data from the Investment Company Institute shows that near-retirement households with annual incomes over $200,000 had saved an average of $885,000 in 2010, compared with just $49,600 for households with incomes ranging from $30,000 to $45,000. And 45 percent of working-age households own no retirement account assets whatever, according to the National Institute on Retirement Security (NIRS).
If this doesn’t make you shiver, I don’t know what will. The average person won’t be able to afford cable television let alone healthcare or even a vacation if the status quo continues.
In terms of the condition of Social Security, some interesting statistics were presented that we should pay attention to:
The National Academy of Social Insurance projects that in 2015 Social Security will replace 35 percent of the median worker’s pre-retirement income at age 65 – down from 39 percent in 2002. And the replacement rate will fall further, to 31 percent, by 2030.
Less than one-third of households headed by a worker younger than 44 had access to a traditional pension in 2010, according to NIRS.
I don’t know anything about the group profiled in the article, nor am I endorsing the path they are lobbying for (partially because I have not reviewed their ideas or alternative ideas enough), but I am very concerned about retirement in this country.
Scott Dauenhauer, CFP, MSFP, AIF