The number of US workers in the labor market over the age of 75 is expected to nearly double over the next decade, creating a looming retirement crisis.
Retirement savings in the United States were long thought of as a three-legged stool. Americans had pension plans, Social Security benefits, and defined contribution plans like the 401(k). Not anymore.
Pension plans are nearly extinct. About half of private sector workers were covered by those so-called defined-benefit plans in the mid-1980s, but by 2022 only 15% of private sector workers had them.
Social Security payments still provide about 90% of income for more than a quarter of older adults, according to Social Security Agency surveys. But the Social Security trust fund is facing a 75-year deficit, and without intervention it will be depleted by the mid-2030s, meaning that only a portion of retirees’ expected benefits will be paid out. Lawmakers have faced a decades-long political stalemate on how to fix it.
What’s left is the 401(k), which 68% of private industry workers have access to, but only 50% use.
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Simple solution for saving Social Security - raise or remove the cap on earnings.
Right now, we tax poor people higher than people making over $170k.
The more money you make, the less you pay. It’s a reverse-progressive tax. Let’s tax rich people the same as poor people.This. Why do income taxes stop at 170k?? What possible reason is there, logically, surely there had to be an initial reasoning?
We’re in a plutocracy.
The SSA has a great site showing projections into the future of various proposed modifications. That plan specifically does not on its own solve the problem completely (though it does help, extending the time frame for exhaustion of the trust fund out to 2060 or so). If we wish to avoid the exhaustion of the trust fund, we’ll need other measures as well.
Although it doesn’t solve the problem long term it buys enough time to not deal with it for another generation. Ethically applying a tax to all but the wealthy doesn’t make sense anyway, so the public backlash for this option should be much lower than all others proposed with this level of impact.
Social Security payments still provide about 90% of income for more than a quarter of older adults…
And conservatives desperately want to get rid of Social Security. In fact, at every opportunity, they fight against the ability for people to retire. Conservatives delight in the misery and death of the most vulnerable, including the elderly. This is just who conservatives are at their core.
These problems cannot be solved as long as conservatives have the power to cause such problems.
Conservatives are just easier to dupe. Their values align more with the goals of our adversaries. I would feel bad for them since the odds are stacked against them. But if they can bitch about their wife or daughter, why can’t they bitch about the guy fucking them in the ass?
Retirement? No, it’s just a legend.
So, what you got a laptop and a calculator? And a bound notebook . . and an ipad? And two of you working on it with no bills or statements it seems. So I think I see some efficiencies we can wrest out of your process here.
50% in 401k is about equal to the 50% that was in the pension plans. In the mid 1980s 401k was not common (it wasn’t even an option until 1978 and took time to catch on). If you are lucky enough to have a 401k option you are better off than a defined benefit pension which had so many limits that you didn’t want it - they were great if work for the same company for life but if you switch jobs they don’t follow you. My dad started a job in 1975 that had a pension - when he was older he regretted not joining it until he did the math and discovered on retirement he would have got $.75/month from it - the company laid him off in 1985 so he had no option of contributed for 30 years where it might have been an okay deal - but only okay as the inflation of the years between joining and retiring wasn’t factored in.
Pensions should be a better deal than they are, but they have so many limits in the real world that make them a terrible investment. Overall we are about the same. Though I agree 50% not having a good retirement plan in place (only SS is not a good plan) is not a good situation.
If the pensions were government-backed, those issues wouldn’t exist.
Social security is government backed and here we are.
Pensions are government backed as well. Some of the reasons they are a bad idea is the government doesn’t want to take them over when they lose all and so laws force overly conservative investments which means low return on investment. (do not confuse conservative investment with conservative politics) This was done because some companies made some really bad pension investments and so their retirees lost all (pension invested in company stock, company went bankrupt and people months away from retirement or already retired lost), but the end result is 401k has a much better return on investment.
