Robert Powell wrote a frightening story guaranteed to disturb my sleep. The article Retirement in America is Endangered appears online in Market Watch, The Wall Street Journal. Most financial articles confuse me, but Mr. Powell successfully educates in simple terms the serious danger of relying on the current Social Security system for retirement support.
Mr. Powell writes “The combined Social Security trust funds will be exhausted in 2036 and at that point there will only be enough income coming in to pay for 77% of scheduled benefits. Just half of the 150 million or so working Americans have an employer-sponsored retirement plan at work. And the 75 million workers who don’t have a retirement plan at work aren’t saving anything at all for their golden years.”
For many, Social Security is all they will have for support when they retire. Someone, such as the politicians we elected (in essence hired to care for Americans) should be addressing the problem, seeking solutions, but they are not. Even if the deficit in future Social Security payouts is corrected, the payments probably will not be enough money to cover basic living expenses.
Michael Falcon, head of retirement at J.P. Morgan Asset Management said, “America is facing an unprecedented retirement challenge ... 20% of the population will be over 65 years old by 2020 and many Americans are significantly short of the savings they will need for a dignified retirement and are unprepared for the complex financial choices they will need to make.”
The United States Department of Labor states the average American spends 20 years in retirement. For ideas of how to enjoy those years visit the Top 10 Ways to Prepare for Retirement
Since Mr. Powell and Mr. Falcon are telling a story that scares me, I plan to use the coming years to change the scenario. Take time to review your plans and then may we all live happily ever after.