Half of Gen X Doesn’t Expect to Retire
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“They are earning money and paying into Social Security and yet they fear they may never see the payback,” said Moloney. “They feel they deserve it, but it looks like a financial black hole to them right now.”
The government certainly is failing to pay for future obligations today instead choosing to raise taxes on the future. But Social Security itself is actually in better shape than most think. We really do need to move out the benefit payment date (when it began projected life expectancy was almost the same as the date payments would start – which would mean moving the retirement date more than 15 years later, I believe). Going that far is not needed but it should be moved back. But really social security is in good shape for 30 years or more. First, it isn’t going to go from good shape to failed in a day. And second, they will make adjustments as they have in the past to make it work (the adjustment they made in the last 15 years helped a great deal so now they can just add some additional delays in when it starts paying out… and extend the good condition of Social Security without too much trouble).
Medicare is the huge problem. The country either needs to stop paying an extra 50-80% for health care than other countries do (and thus reduce the cost of Medicare liabilities) or massively cut benefits or massively increase taxes. Likely a combination of all 3.
The 40% that have less than $25,000 should be worried. Not about social security, they will get everything they are promised by social security (the welfare aspect of social security will be the last thing cut – long before that is cut Bill Gates and other not quite so rich, will stop getting their checks which should give the system long enough to pay out even if other failures of the current politicians mean that the spending they did today costs too much for the taxpayers they are giving the bill to in the future) but that equals poverty if you don’t have much more that what social security provides coming in from other sources. Worry about the real problem, the lack of retirement savings and then do something about it. What? It isn’t very tricky. Save money.
Related: Retirement Savings Survey Results – Boomers Face Retirement – Retirement Tips from TIAA CREF – Washington Paying Out Money it Doesn’t Have – Government Waste
Gen X are those born between 1965 and 1981.
Comments
3 Comments so far
I agree, not knowing how much to save is both frustrating and anxiety provoking. I’d like to know who thought of this new system. Probably the heads of companies that wanted to get rid of their pension plans!
The most important thing is to start saving early and don’t stop and don’t withdraw any early. If you can’t afford to put in as much as you should then put in what you can, and increase it as soon as you can…
The solution for Gen X like me is to get the hell out of USA if the entitlement issue is not solved in a way that is fair to us. There is absolute no need for Medicare to exist when 1 in 8 kids have no access to health care.
If there is no access to health care for the young and productive, there should be none for the old. It’s an investment in the future versus spending in delaying the inevitable (death).
The old in this country will end up poor anyway and alone if they keep on pushing it too far.