10 reasons we must urgently get over our retirement crisis denial   

Despite the escalation of America’s retirement crisis, some conservative economists have had an ominous reaction, denying there is a retirement crisis and saying there is no need to worry, despite mounting evidence to the contrary. claims.

This wave of denial comes as follows There are many reports This means that millions of older Americans are living in poverty, and millions more lack the savings and retirement plans they need to live comfortably in retirement. report Documented by Sen. Bernie Sanders (I-Vermont).

Black Rock CEO Larry Fink I made a headline In an 11,000-word warning to shareholders, it said, “Nearly half of Americans ages 55 to 65 report not having a single dollar of personal savings.” retirement account” according to U.S. Census data. “There’s nothing in your pension. Zero in your IRA or 401(k).”

“No wonder younger generations, Millennials and Gen Z, are financially insecure,” Fink added ominously. “They believe that my generation, the baby boomers, have been so focused on their own financial well-being that they are doing a disservice to those who come next. And in the case of retirement, they are right. .”

In the face of all this, economists at the American Enterprise Institute (AEI) recently argued that: wall street journal “You don’t have to be a millionaire to retire,” he argued, and research shows “most retirees report doing well.”Heritage Foundation Economist testified “Official poverty rates for older Americans (age 65 and older), both historically and relative to the rest of the population, do not suggest a retirement crisis,” he said at a U.S. Senate hearing.

Economists focus on Federal Reserve policy response Survey on household economics and decision makingAmong them, 49% of respondents aged 65 to 74 answered that they were “living comfortably.”

But there is a problem with this hopeful number. How long will they be able to live comfortably? Are large medical and nursing care costs already impacting their families? Are some people unwilling to complain?

On the other hand, more than half of older Americans do not have Well-being – 51% say they’re “getting by,” “doing just fine,” or “finding it hard to get by,” a vote of confidence to be precise. It’s not a security vote.

These conservative economists confidently say there’s “no need to worry,” detailing the widespread and severe economic instability among older Americans, and offering advice on retirement and basic economics. It ignores the vast body of research that shows that it harms both safety and security.

Why isn’t it a crisis when at least 10 percent of Americans over 65 (more than 5 million people, probably about 12 million) live in poverty? Why deny or ignore the crisis? The most likely motive is to blunt the growing support for improvements to pensions and Social Security.

Whether naysayers want to admit it or not, America is facing a retirement crisis. Here are 10 reasons why.

1. One in five American households between the ages of 55 and 64 Total assets less than $100,000 Based on our analysis, there are no defined benefit retirement plans. Federal Reserve Board Data. This includes everything from trading accounts, CDs, investment funds, bonds, stocks, whole life insurance, managed assets, retirement accounts, vehicle assets, real estate and business assets, lines of credit, credit cards, student loans, and other debt. is counted.

2. More than 10 percent of Americans aged at least 65 live in poverty, according to official U.S. measurements. meanwhile, relative poverty data The Organization for Economic Co-operation and Development presents an even worse picture. estimate that 23 percent of older Americans live in poverty — meaning they live on only 50 percent of the U.S. land area median income, approximately $23,200 per year. Research shows that this is not enough for most people to retire in a comfortable and safe manner.

3. Amid this economic vulnerability, the cost of long-term elderly care is rising. The average American who turns 65 today $120,900 to support future long-term services and paid care. — However, this does not cover all care costs, and the actual costs are much higher, as many people supplement their care with unpaid family care.Long-term care costs start at $20,280 per year for community services such as adult day care Up to $108,405 In a private room at a nursing facility.most Americans say it would be impossible or very difficult They can afford to live in a nursing home for a year (90 percent) or receive help from a paid aide for a year (83 percent).

4. Up to 40% of middle-income workers are at risk of downward mobility into poverty or near-poverty after retirement; Because of an inefficient retirement system that unfairly benefits high-income earners. Our analysis shows that due to systemic deficiencies in retirement systems, the number of people aged 62 and older living in poverty or near poverty will increase by 22.3 percent between 2019 and 2045, from 18 million to 21.3 million. has been shown to increase.

5. almost Half (49.4%) of Americans ages 55-64 say they cannot afford more than $2,000 for an emergency.; our analysis of the Federal Reserve; survey data It shows that 38.2% cannot afford to pay $1,000 in case of an emergency.

6. America’s pension system has been in deep long-term decline, currently ranking 22nd out of 47 countries, barely earning a passing grade of C+ on the prestigious pension system. Melbourne Mercer Global Pension Index. This internationally recognized index rates the United States poorly in terms of adequacy of security and retirement benefits, financial sustainability, and integrity of regulatory and governance systems.

7. Due to financial pressures and inadequate retirement savings, One in five seniors claims Social Security before reaching full retirement age; Studies show that this can result in a loss of up to 30% of profits. Schwartz Center for Economic Policy Analysis.

8. Millions of Americans over the age of 65 work in physically demanding and sometimes dangerous jobs., which can harm your health and impair your ability to retire.our research result More than 25 percent of older white workers and more than 40 percent of older black and Hispanic workers struggle with physically demanding jobs. Meanwhile, other people who need to continue working are forced out. Among workers aged 55 to 64, of involuntary resignation rate 45% of workers over 65 are forced into early retirement.our research result These trends are related. Older workers are often forced into retirement due to poor health from physically demanding and dangerous work.

9. Post-retirement anxiety and uncertainty are widespread. Among the elders of the United States. When asked, “Do you think your retirement savings plan is currently on track?”, 46.9% of people aged 55 to 64 answered 39% of 65-74 year olds say so. do not have They’re on track for retirement, according to an analysis of the Federal Reserve’s Household Economics and Decision Making Survey.

10. Over the past 20 years, retirement income has remained flat, but spending has skyrocketed. According to our analysis, consumption expenditure survey According to a study conducted by the U.S. Bureau of Labor Statistics, inflation-adjusted median retirement income increased by only 1% between 2004 and 2022. At the same time, inflation-adjusted median spending for Americans 65 and older skyrocketed by 29%.

The retirement crisis is even worse than conservative numbers are trying to suggest. Economists at the Heritage Foundation and the American Enterprise Institute rely on averages that greatly downplay the crisis. These averages are driven up by the top 10 percent of income and retirement wealth. Conservatives minimize and ignore the extent of the crisis by emphasizing average incomes, assets, and retirement savings.

Rather than playing numbers games to deny or ignore America’s retirement crisis, which negatively impacts the reality facing older Americans, we need solutions. First, Americans Retirement Savings Actis a bipartisan, bicameral bill that would extend retirement benefits to private-sector workers who don’t have any security. Modeled on the successful Federal Thrift Savings Plan, the legislation features automatic enrollment, portability, superior investment options, smart savings release, and a 5 percent government match for eligible savers.

America’s retirement crisis is all too real and multilayered, affecting millions of older Americans who are poor or near poverty, or who lack the resources for a secure retirement after a lifetime of hard work. It’s having an impact.

Christopher D. Cook is Schwartz Center for Economic Policy Analysis (SCEPA). Teresa Ghilarducci is a professor of economics at the New School for Social Research and author of .work, retirement, repeatSCEPA researchers Drystan Phillips, Jessica Forden, and Karthik Manickam contributed to this article.