Social Security

I came across an interesting confirmation of my belief that US Social Security is essentially a Ponzi scheme. Or as Instapundit is wont to say, that which can’t continue, won’t. I was interested to find out that according to the article,

To make Social Security solvent again, the payroll tax rate would need to be hiked immediately from 12.4 percent to 15.2 percent, or Social Security benefits would need to be cut on a permanent basis by about 17 percent.

This to me means that the system, as such, is not irretrievable. Interesting.

Nonetheless, out of curiosity, I did a search on the retirement savings of Boomers (1945 – 1963), but found this which had comments about everyone. Two thing to note. The stats I found vary somewhat but all indicate that people are not saving as they should. Second, I think the article grossly exaggerates what people will need when they retire and I have some expertise in this arena. Anyway:

The first thing to know is that the average American has nothing saved for retirement, or so little it won’t help. By far the most common retirement account has nothing in it.

Sources differ, but the story remains the same. According to a 2018 study by Northwestern Mutual, 21% of Americans have no retirement savings and an additional 10% have less than $5,000 in savings. A third of Baby Boomers currently in, or approaching, retirement age have between nothing and $25,000 set aside.

The Economic Policy Institute (EPI) paints an even bleaker picture. Their data from 2013 reports that “nearly half of families have no retirement account savings at all.” For most age groups, the group found, “median account balances in 2013 were less than half their pre-recession peak and lower than at the start of the new millennium.”

The EPI further found these numbers even worse for millennials. Nearly six in 10 have no retirement savings whatsoever.

But financial experts advise that the average 65 year old have between $1 million and $1.5 million set aside for retirement.

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