Have you heard about the retirement income gap?
By Thom Hartmann A...
Low wages aren't the only reason that the poor are getting poorer and the richer are getting richer.
According to new research from the Economic Policy Institute, high-income Americans are 10 times more likely to have retirement accounts than those at the low-end of the income spectrum. And, the national shift away from defined-benefit pension plans into 401(k)'s has left more and more older Americans retiring in poverty.
In the richest nation on the planet, this is simply unacceptable. That's why EPI and other organizations are pushing Congress to expand – not cut – Social Security benefits.
Decades ago, most working-class Americans were able to retire with dignity because of the defined-benefit plans provided by their employers, but that's no longer the case. Those plans were pretty much wiped out and replaced with 401(k) plans that may or may not include matched contributions from employers.
As low-wage workers don't have much to contribute, employers don't match anything, and retiring workers end up with little-to-no savings when it comes time to leave the workforce. And, even if some workers were able to save, their savings were subject to the turns of the stock market.
Wealthier workers were able to contribute and save more in their retirement plans, and they are often better able to withstand the ups and downs of the market. The income disparity in retirement savings is so pronounced, 74 percent of total savings in retirement accounts belongs to the top 20 percent of earners, even though that group only brings in 63 percent of all income.
Rich people aren't just earning more, they're saving more, and that leaves them in better shape for retirement. Poor people are left with no choice but to rely on Social Security benefits, which leaves them living in poverty.
We can and should do better, and that starts with expanding, not cutting, these important benefits on which so many rely.
Comments
#2
Thanks for that! I am a retired 70yo physician, who lives on his $2445/mo Social Security and I'm comfortable but certainly not well off. Some years ago an investigative news program took a trip to Harpers Ferry, WVa., and visited a small Federal office bldg. there. Inside was a single clerk sitting behind a gunmetal desk. When asked, she showed the reporter the Social Security Trust Bonds, which were housed in a single room lined with filing cabinets. When the reporter asked to see one of these Bonds, she opened a drawer and pulled out one Bond. It was title "Social Security Trust Fund Bond" or something of the kind and denominated as $100,000,000. It stated: The Congress of the United States owes the American People $100,000,000. The total debt stored in that room about a decade ago was $14,000,000,000,000. George W. Bush once stood on the steps of the White House and suggested that one way to handle this debt would be to simply destroy these Bonds, but, then, he's an international war criminal anyway. I expect the Congress to honor their debt, my debt, as I paid in the maximum amount over much of my 40 yr. medical career, when my income was $120-130K/yr. This is not an "entitlement". It is a fair and true debt owed to those of us American working people who trusted this government to honor their debt to us. Otherwise, I'm goin' gunnin' for them. I know that they, the Congress and President, think that they can get away with stealing our S.S. contributions to pay for their endless wars, and their kick-backs from the Military Industry. I've got news for them. We have not forgotten their obligation to the American people, even if they would like to. Go Bernie!!!
#3
The best solution to the inequality of our current monopoly capitalistic system is to replace it with Land Share Democracy (LSD). In a LSD society all political levels (city, county, state, national) would gradually shift taxes off human production (both labor and capital) and, instead, charge a user fee for our Common Wealth or Land. "Land" represents all natural opportunities and resources in classical economics.
For example, if someone wants to pollute the sky with carbon and other pollutants they are welcomed to do so but they would need to pay a user fee for the sky that would gradually increase over time. The revenue would be put into a Community Trust and distributed to everyone on a monthly basis. Yes there are details but this Sky solution is called Fee and Dividend. Likewise all natural resources - that the uber rich have privatized -- would have a user (rental) fee that would cover essential government services, restoration of our environment to save diversity of species, and a monthly citizen's dividend.
#4
Would love to lower social security and medicare down to age 50 or lower.
However, if a national ID card can not be effectively implemented, then how can a US citizen be distinguished from an illegal?
Dems think ID cards are just another way that Repubs screw people out of their vote.
But the cards would also be useful to track status for driving, health, and benefits.
A single national database would clearly save millions of adminstrative dollars.
ct
#5
The most sure fire way to bring down the Teapublic Party is to inform those who vote for Teabagger candidates that their so called representatives want to downsize the program and eventually turn it into private investment accounts so Wall Street can get their meat hooks into it, not to mention raise the age of eligibility again, a Paul Ryan obsession. Apparently not enough of us are dying before age of eligibility to make Paul happy. I've paid in for 41 straight years now and I'm not even 60 yet ....so go to hell Ryan.
Most of us know the Social Security fund is all that's left to steal from the vast majority. The corpse media won't mention which party is anti social security so it's up to all of us to inform our foxmerized friends and neighbors which party wants them to suffer in poverty during old age....this just to give their wealthy bankster benefactors even more billions.
I wonder how guys like Paul Ryan would feel if someone came along and stole their government pensions????? Maybe Paul shouldn't be allowed access to his pension until he's 80???
#6
There is another down side to retired people having little to live on. They don't have much money to spend and that hurts, not helps the economy and businesses. I'm almost 66 years old and have not seen any relatives retire on savings. One grandfather retired with a pension from Cotton Belt Railroad. He was a member of the Railway Clerks union. The other retired with a pension from Southern Bell Telephone Company. He was a lineman. My dad, an uncle, and I retired with pensions from Plumbers Local Union # 17. I've seen people retire on savings and Social Security only to return to the workforce because their savings ran out. I've seen people dip into their 401Ks during employment gaps and now don't know when or if they will be able to retire. I see ads on TV for retirement accounts. I don't know who these ads are targeting. They must be for wealthy people or suckers. The average person can't save enough to live well on until they're 92. Lets say you want to retire at 62 and live on Social Security and savings until your 92. Besides Social Security. you want $40,000 per year for ten years, $50,000 for the next ten years (adjusting for inflation), then $60,000 for ten years. You would need to save $1,500,000. Most people can't do this, so retirement savings plans will not work well for most people. Only pension plans provide a secure future for retirees. My grandson wants to be an auto mechanic. I advised him to get a job with a defined benefit retirement program. He said he didn't know of any auto mechanics unions. I told him to get a government job. I asked him who he thinks works on police cars, fire trucks, and code enforcement vehicles? Those mechanics usually have a pension plan. Social security is better than nothing but Social Security payments would have to at least be tripled to live well on without a pension. It's not a bad Idea to triple Social security payments. That would be good for all retirees and the economy. It would require putting money into Social Security instead of pension plans. 401Ks, and other retirement accounts. Unions may not like this idea because pension plans are great union recruiting tools but as a union man, I'm for helping all workers, union and non-union alike. One great benefit to tripling Social Security is a person will not lose a great retirement program every time they lose or change jobs. The biggest problem I see is the misleading of young people in the workforce into thinking that a person must save money for retirement. They are not being taught the difference between a defined contribution plan and a defined benefit plan. This is information they need to be given to make an intelligent choice for a decent elderly future.
#7
Well Said, Doc
#8
I have known for many years that my retirement party will be my funeral, one way or another.
#9
Does anyone know what law let employers switch to defined contribution pension policies? Whatever it was, let us repeal it.
#10
Rford. I told my sons to start their own business. Do as I did work seven days a week, twelve hours a day and soon it would pay off like it did for me, because without people like me there would be no one to pay they taxes to create those government jobs with those great benifits that you want your grandson to have. Someone has to do it.
#11
I know that Saint Raygun screwed federal employees in 1983 cutting the federal pensions to 1% from 2% for 30 years of service. Then the traitor introducted a plan whereby employees could invest in their retirement with a government match. Saint Raygun also prohibited federal retirees from drawing Social Security even though they me the minimum 40 quarters. That is who screwed the federal employee. After Saint Raygun started destroying unions, it caught on with the cheap bastard ceo's.
#12
Obama has done really nothing to help the working and retired. As soon as he was sworn into office he hand picked a republican cabinet and you wonder why he was influenced or maybe not with his policies. He is a day late and a policy short . Giving him credit for the some of the change he promised is a little misguided when now we are facing a global financial meltdown because nobody is accountable for all the wall street greed that he is part of! Now we have the choice between a criminal and tyrant for president. Don't hold your breath for change we can believe in.
#13
RFord - Saint Raygun made government agencies privatize all government shops. I worked for the US Forest Service in California at the time and we used to repair our own equipment. Then along came that asshole Saint Raygun and made us contract with a private company to run OUR shop. We provided the shop and the tools and had to keep one person on to inspect the work. We had to do an in depth study to of our repair history, put a price on it and prove that we could do it cheaper. This is and was totally unacceptable and I told Raygun and his goons to F off and quit. I believe that government vehicles for most cities are mostly farmed out to local repair shops. I don't know about States and Counties. They hopefully told Saint Raygun to F off as well.
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Maybe a rigged housing market.
http://www.doctorhousingbubble.com/crisis-in-american-housing-us-rents-h...