OLDER AMERICANS LOSE SENSE OF SECURITY

Retirement in America is crumbling.

More than 40 percent of households headed by people age 55-to-70 lack sufficient resources to maintain their living standard in retirement, according to an examination published June 22 in the Wall Street Journal.

Even more troubling are the millions who face a future that has no resemblance to the standard of living they once knew. We have not experienced this level of desperation since the 1950s.

Over time, Individual Retirement Accounts (IRA) have replaced pensions as the primary source of retirement income, “supplemented” by Social Security.

Today, however, the average IRA  account is $135,000 in households with at least one worker between the ages of 55-64. This investment will return less than $8,000 a year to pay for household expenses, food,medical costs….Who are we kidding? For them, Social Security is the mainstay, not just a supplement in retirement.

How did we get here? Certainly, many Americans have been financially irresponsible. Others, stranded in the job market in middle age, thought their luck would surely change.

But other, more systemic factors have taken their toll. Health premiums for the family of a displaced worker can be $15,000 a year or more, not including deductible and out-of pocket expenses. And that doesn’t include the rise in dental costs; a root canal and crown can cost $1200 or more.

Other factors include:

  • the loss of employment during the prime earning years, compounded by ageism
  • depleted IRA accounts that millions have been forced to use to pay for living expenses. (withdrawals before you’re 59½ and pay a penalty as well.)
  • The  widening wealth gap
  • stagnant wages
  • more consumer debt to pay for everyday expenses
  • high credit card interest rates for those who struggle to make payments
  • the cost of caring for elderly parents
  • College loan debt – not for themselves, but for their children –  that amounts to approximately $1600 per capita for those age 60 to 69.
  • Disease or mental health issues that have diminished the earning capacity of the afflicted

So, confronting this dire reality, the Republican-controlled Congress sought to take action that will only make matters worse for retired Americans.

Last month, the House Budget Committee released a proposal to make large cuts to entitlement programs that would help balance the budget in nine years. This includes squeezing $537 billion out of Medicare alone. Changes to Medicaid and other health programs would bring that total to $1.5 trillion. (Republican proposal Washington Post)

Social Security would be cut only $4 billion over the decade. However, the budget proposes $230 billion in cuts from education and training programs, including consolidating student loan programs and reducing Pell Grant awards.

In a twisted irony, Republicans call the plan ““A Brighter American Future.”

For whom?

The proposal is still in committee, but as the Washington Post reported:

“…..the budget serves as an expression of Republicans’ priorities at a time of rapidly rising deficits and debt. Although the nation’s growing indebtedness has been exacerbated by the GOP’s own policy decisions — including the new tax law, which most analyses say will add at least $1 trillion to the debt — Republicans on the Budget Committee said they felt a responsibility to put the nation on a sounder fiscal trajectory.”

Translated: Republicans once again intend to plunder middle- and working-class families to pay for their trillion-dollar tax giveaway to the wealthy and corporations. The wealthy include many members of Congress, who enjoy government pensions and health coverage as well.

A lack of empathy doesn’t begin to describe it.

–Richard Leonard, Communications Committee, Democrats of Indian River