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Those words are repeated in video after video on Facebook by seniors (possibly actors) complaining they can’t pay their bills because Social Security is inadequate and does not keep up with rising costs. “We worked our whole lives and paid into SS and this is what we get?” they ask.
What is disturbing to me are the thousands of “likes” the videos receive and the hundreds of agreeing comments posted every time. In essence, agreement with the basic idea Social Security today is not what was promised. The fact is, it is exactly what was promised by FDR.
“We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”
To make matters worse, misinformation and outright lies are rampant-perhaps intentionally.
Nobody stole SS funds, nobody misused the funds, Social Security would not be solvent if we eliminated the FICA wage cap, any illegal collecting of benefits is very minimal, and your benefits are not based on FICA taxes paid as some claim.
SS is insurance; way more than retirement income and provides benefits far beyond any funded by an individual’s taxes.
Demographics are the main cause of inadequate funding at current tax levels. The Trustees have been warning for over a decade changes are needed to maintain promised benefits.
Is this retirement in America? Do seniors reach age 65 assuming Social Security will carry them through? Relying solely or mainly on Social Security when retired is not doing everything right.
According to AARP estimates, Social Security provides these income replacement levels.
• Low earners: ~57% .
• Medium (~$69k): ~42–45%.
• Higher earners see lower rates ~35% at $111k.
It is sad many seniors reach the point of desperation in retirement, especially when it is the result of going through life with a lack of basic financial education and planning.
What is the solution? Essentially a fundamental change in lifestyles before and after retirement, but don’t count on that. Greater financial acumen and prudent behavior? It would help.
Simply increase Social Security benefits to achieve higher income replacement levels? That requires higher taxes, but even before debating that, we need to make the program sustainable as it is.
I see no way to improve retirement income without individuals taking more responsibility during their working lives, something obvious to HD readers.
On a positive note, I have observed quite a few people who never had the interest, nor spent the time, truly mastering moderate- to high-level retirement planning. Their interests were in other areas. That said, they lived/do live financially conservative lives and never had outsized expectations of what Social Security was supposed to provide on a relative basis. Many, but not all, of whom I speak were old enough to have actually lived through—and were historical observers of—the period of time when Social Security was established. On average, I would say these people were/are some of the happiest people I have known. Without ever reading, or perhaps even knowing about, Bogle, they found their own version of “Enough.”
I think these people don’t get enough “press,” but in a way, I have always admired them.
On the less positive side, two thoughts come to mind:
I was fortunate to work with five unions who supported me in our efforts to communicate to their members on how to obtain the most value from their employee benefits. They wanted appreciation from members for what they had negotiated and we both wanted value for the cost of the benefits, the unions well aware they gave up some pay to obtain those benefits. We were both frustrated at the high level of indifference by many workers.
Dick, I’ve had associations with many folks who just don’t participate in our economy in the same way as our readers. Some spend their lives avoiding work. Others avoid work that requires using the English and math that eluded them in school. Even many educated people suffer financial illiteracy.
I once met with a man to show him a better way to invest his IRA dollars. He was saving a pittance in a high-fee fund, but neither his head nor his heart was in the task. Before we began, he told me that he felt like he was placing his money in the hands of the same people who controlled his life in other ways and were keeping him from progressing. He had a college degree, but he was mentally influenced by the struggles his family had known for generations.
I think there is a segment of our population who will never understand the simple principles of personal finance for one reason or another. But we need to keep trying to educate those who will listen.