Editorial: The Retirement Crisis Is Upon Us
Stay up to date with the latest headlines via email.
At the end of the year, we launched AlterNet’s Retirement Crisis Reporting Project. Despite the hundreds of end-of-the-year fundraising campaigns, 243 AlterNet readers contributed $6,870 to get us off to a great start. This is reader-supported, "crowdfunded” journalism at its best. But this is just the beginning. We will need lots of help going forward.
Unless we get serious and do something about it now, we are very quickly heading into a massive retirement crisis, not just for the huge, aging Baby 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 others 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 403bs 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 from Barack Obama to the billionaire propagandist Pete Peterson to the Washington Post editorial page, are hard at work making it worse, by wanting to shrink benefits, not expand them.
To sum up the problem and the solution, here are nine key facts about the 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 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 of $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 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 don't realize that no Social Security taxes are paid on incomes over $117,000, so the wealth get off 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 into the system themselves? That is the question at hand. There is no other issue in America where those in power are so out of sync with the voters and the people.
A series of simple, fair-minded fixes would make Social Security solvent for decades, and would allow us to expand the benefits so no Americans fall into poverty as they age. That is a worthy goal for all of us, don't you think?
Please, if you agree that the retirement crisis requires effective public education and organizing, then please support our Retirement Crisis Campaign. Every little bit helps. You will be working in your own interest and on behalf of so many fellow Americans in need. We will be working on the retirement crisis all year, and into the future.