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Posts Tagged 'Retirement'

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Seniors and the State of the Union

Here’s reaction to last night’s State of the Union address  from National Committee President/CEO, Max Richtman:

“American families, across generations, will be encouraged to see our President acknowledge that job creation and economic insecurity are among the greatest challenges facing millions of average Americans. President Obama is right, too many have been left behind and still face unemployment, stagnant wages and an insecure future, even as the economy recovers.  The President’s promise of a year of action to restore the basic bargain that built this country should also include preserving and strengthening the nation’s retirement and health security programs, Social Security and Medicare.

While we support proposals that encourage independent savings strategies, the surest and most time-tested path to economic security for older Americans is through the Social Security program. We urge the President to use his power and influence to boost the nation’s retirement system which has successfully served millions of Americans for more than 78 years.  

Social Security benefits are not keeping pace with the cost of living in America. The average monthly benefit of $1269 is akin to a monthly paycheck for a worker on minimum wage. While the President is committed to raising the federal minimum wage to $10 per hour for workers, we would also like to see the President support an increase of $70 per month in Social Security benefits for retired workers as proposed by Senator Tom Harkin and Congresswoman Linda Sanchez in S.567 /H.R.3118.  This benefit improvement could be paid for by lifting the payroll wage cap.

Rather than calling for benefits cuts through proposals like the Chained CPI, we should be talking about boosting benefits, adopting the more accurate consumer price index for the elderly (CPI-E) and increasing the minimum benefit formula. We urge the President to remember that reducing already modest benefits to seniors isn’t the path to economic security. The future of America’s retirees must remain a part of this debate. “…Max Richtman, NCPSSM President/CEO

                                                                      

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Americans Work Longer for Fewer Retirement Benefits

Kudos to Kathy Ruffing at the Center on Budget and Policy Priorities for her research highlighted in today’s  Off the Charts blog post.

“U.S. seniors are more likely to be in the workforce than their peers in almost every other developed country.  Nearly 30 percent of Americans ages 65 through 69 were employed in 2012.  That’s about three times the European average, according to the Organisation for Economic Co-operation and Development (see chart).”

 

We suggest you read the entire blog post for the full picture of just how poorly the U.S. stacks up when compared to how other nations treat their seniors.  As CBPP puts it:

“The moral?  Our seniors already work harder and get lower benefits than their counterparts in most other rich countries.  So imposing big benefit cuts on ordinary seniors would be the wrong way to restore Social Security solvency.”

We couldn’t agree more!

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Retired and Bankrupt

As the great recession drags on it’s clear that the average American’s dream of retirement may be just that…a dream. Far from the fiscal hawks’ mythology of “greedy geezers”  living high on the government hog or cow,  or whatever farm analogy you prefer, it’s clear that a growing number of seniors are facing frightening fiscal futures. There have been a number of stories recently highlighting the realities facing today’s retirees. USA Today wrote:

The ranks of older bankruptcy filers also have been swelling rapidly. From 1991 to 2007, bankruptcy filings by those 65 and older increased by 150%, while filings in the 75-to-84 age group soared 433%, according to the Consumer Bankruptcy Project. Older Americans are staggering under debt because of a variety of problems — from unexpected job losses late in life and underemployment to overwhelming medical bills and providing financial help to their children and grandchildren, analysts say. Making the issue even more serious: They have little time to climb out of debt, says Matthew Beatman, bankruptcy lawyer at Zeisler & Zeisler in Bridgeport, Conn.
A University of Michigan Law School study examined why Americans over 65 are the fastest growing demographic of bankruptcy filers and reports that seniors blame credit card debt.
And though older bankruptcy filers blame credit cards for their debt, they're not the underlying cause of their problems. Much of the credit card debt resulted from attempts to supplement lost income. "When people in their 50s are laid off after they have been at the same company for 25 to 30 years, they find things have changed," says Brian Grogg, a credit counselor at GreenPath Debt Solution in Farmington Hills, Mich. "They need to know more about computers. They find it harder to get a job."  And seniors who rely on Social Security are finding it insufficient. There will be no increase in retirement benefits  in 2011 for the second year in a row. -- USA Today
As we’ve reported here before, we can not afford to ignore the growing Retirement Income Deficit facing millions of Americans. Yet, that’s exactly what’s happening  in Washington in the rush to balance the federal books on the backs of programs like Social Security and Medicare.

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Why Americans Really Retire Early

We all know the real-life retirement picture for Americans is quite different than the ridiculous caricature  of old cats  living " in gated communities and driv(ing) their Lexus to the Perkins restaurant to get the AARP discount".  This "greedy geezer" myth so frequently proferred by some in Washington, makes for good newspaper copy but of course bears no resemblance to the frightening reality facing millions of seniors who've seen their retirement savings decimated, their home values plummet and face new threats of cuts to Social Security through raising the retirement age, means testing or countless other ways. That's why we were especially glad to find a CNN piece that actually took the time to step outside the confines of Washington deficit-mania to ask a simple question: Why did you take Social Security early?  While the answers don't surprise us because we talk to seniors each and every day...these answers certainly don't fit the greedy geezer mythology promoted by so-called "deficit hawks" looking for a way to pay for years of failed borrow and spend policies that have absolutely nothing to do with Social Security. Here is just a sampling of the comments.  We really recommend you read the entire piece:

We've been dutifully searching for employment to no avail…We both are in good health and have 80 years of experience between us to offer. Although we each have a pension and some 401(k) funds, we have to start taking Social Security in order to make ends meet. It deeply saddens us to be in this position, but we have no choice.   Paul Henderson, 62   At age 62, I was laid off from my job… I see no jobs on the horizon for anyone, let alone someone of my age. Still, I'm looking.  Elaine Armstrong, 63 That was just the beginning as I found myself in the world of age discrimination. Even though I had years of tech work for companies like Sony, Microsoft, etc. I was unable to get work. Then in 2005, my wife's company decided to shut down her office. It took her 5 years to get a part-time job!  Daniel Ryan, 63

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Don't Buy the Lie about Social Security

A new survey by Sun Life Financial claims that nearly half of all workers questioned would like to stop paying into Social Security, even if that means they don't get any benefits when they retire.  They report more workers in their 30's share this view (59 percent) than those facing retirement soon, 60 and older (33% percent).

On the one hand, you might be surprised to see such results at the same time millions of Americans who did save for retirement, are watching their nest eggs disappear  during this current market meltdown. Without Social Security, even retirees who "did the right thing", only to see their savings evaporate, would now face poverty.  So why would they give up one of the few guaranteed and secure retirement income sources American workers currently have?  Philip Moeller at US News and World Report  speculates this negativity about Social Security, although misplaced, could be blamed on the general negativity we all feel about our economic futures right now.  He could be right.  However, we offer an additional explanation.  Americans who've grown up hearing Social Security won't be there for them, may be starting to believe it.  The well-worn argument against Social Security goes something like this:    
The promise of secure benefits is a "hoax", the taxes paid into the trust fund are "wasted" by the government rather than prudently invested and "the so-called reserve fund...is no reserve at all". 
Sounds like President George Bush, right?  In this case, the comments come from GOP Presidential candidate Alf Landon and his party's 1936 platform, a year before the first Social Security check was even delivered. Now let's fast forward a few decades when Senator and 1964 Presidential candidate Barry Goldwater said: 
"The first thing wrong with Social Security is the fact that it is compulsory. Secondly, it is not actuarially sound: It promises more benefits to more people than the incomes collected will provide."    According to historian MichaelBeschloss, Goldwater also said, "perhaps Social Security should be abolished." 
After generations of trying unsuccessfully to convince the American people to turn against one of the nation's most successful government programs, Social Security opponents took a new tack.  In 1983, they called their new plan "guerrilla warfare against both the current Social Security system and the coalition that supports it".   Their primary goal described in the Cato Journal was to convince the American people Social Security wouldn't be there for them in retirement.  This strategy was designed using privatization to dismantle Social Security all together. 
"The aim is to weaken political support for the present system when the next financial crisis appears."  and "The retired population might then come to realize that they have not purchased an earned annuity but instead are receiving a tremendous welfare subsidy.  Younger workers, on the other hand, would see just how much of a loss they are taking by participating in the program.  This mechanism for demonstrating the individual gains and losses that occur under Social Security is a key step in weakening public support for the present system."
Of course, this is exactly the path President George Bush followed in his failed attempts to privatize Social Security.  The American people rejected his private accounts plan and given the current fiscal meltdown...they're glad they did.  But as you can see, regardless of the decade or the specific approach, the underlying message is and continues to be the same.  "Social Security won't be there for you"..."Social Security is flawed" and the newest incarnation..."we can't afford Social Security".  This, in spite of the overwhelming facts to the contrary.   Today, David Walker and the Peterson Foundation are picking up the anti-Social Security clarion call.  Wealthy financier and former Nixon Commerce Secretary, Pete Peterson has invested $1 billion dollars of his personal fortune to continue the campaign against programs serving America's seniors.  This time the same-tried and true "Social Security won't be there for you" message is wrapped in a cloak of fiscal responsibility.  Peterson is no stranger to the battle against America's retirement safety net.  He's called the current cost of living increases in Social Security, which provide adjustments of roughly 3% a year, "one of the greatest fiscal tragedies of American history" because he considers them excessive.  At the same time, Peterson steadfastly defends a controversial private equity tax break that benefits America's wealthiest investors. So much for fiscal responsibility.   So when someone tells you "Social Security won't be there for me" remember the countless Washington think-tankers, Social Security foes and their allies in Congress who have spent their careers and millions (eventually billions) of dollars selling us that exact message. Ultimately, American workers and their families must sort the facts from the fiction and in the end we must not Buy the Lie we're being sold on Social Security.

**Late addition:  Bruce Webb at Angry Bear has just posted a wonderful piece on the history of Cato's campaign against Social Security.   It's a must-read!

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