“Three quarters of near retirees (ages 50 to 64) have annual incomes below $52,201, with an average total retirement account balance of $26,395,” reports the Schwartz Center for Economic Analysis. “When stretched out into an annuity over an average retirement lifetime, this sum does not provide a significant addition to a monthly Social Security benefit. Further, the median value of retirement account balances for half of near retirees is zero, meaning that over half of this group has no retirement savings.”
The Social Security and Medicare programs are intended to be social safety nets which provide health care and financial stability to the nation’s elderly. But safety nets promote risky behavior, in this instance it’s promoting a lifestyle wherein Americans aren’t preparing to provide for themselves in retirement.
As we can see from these numbers, Americans aren’t saving for their own retirements, no doubt operating under the assumption that they’ll be able to lean on the government for help.
Meanwhile the Social Security program is in deficit right now, paying out more in benefits than it receives in revenues, and there is no trust fund because the government spent that money a long time ago.
Medicare, too, is teetering toward insolvency with the programs trustees expecting it to begin operating in the red by 2024.
So what we have is a tidal wave of retiring Americans, unprepared to care for themselves in their declining years and expectant of a raft of government benefits, rushing toward entitlement programs that are struggling to provide benefits for those already enrolled.
And the politicians are afraid to do anything about any of this because in politics if you talk about this stuff you’re accused of wanting to push the elderly off a cliff.
But the people for whom this news is the worst aren’t those near retirement. It’s those who will be in the work force for decades yet to come who will be tasked with supporting not only the heavy burden of our existing entitlement programs, as they try to scrape enough money together to provide for their own retirements, but an expansion of those programs to provide for a generation of people who couldn’t be bothered to save for themselves.