Just saw this—Linda Stern punches holes in some of the more common misconceptions about retirement:
Stern Advice: Busting retirement myths
What she has to say lines up well with my own observations and thoughts. What about you?
Recent posts tagged ‘Social Security’
A recent article in the Wall Street Journal tells a sad tale of retirement preparedness: The typical pre-retiree baby boomer has less than one-quarter of what he or she needs in a 401(k) plan to retire.
In my view, this assessment is entirely too bleak. As I’ve noted previously, estimating retirement readiness for an entire generation is a difficult task, and the result is sensitive to the assumptions used. Moreover, the issue isn’t a black-and-white question—who’s ready, who isn’t?—but one of degree.
My recent post on the government’s fiscal outlook generated several thoughtful comments.
Two readers mentioned Paul Krugman’s op-ed on Social Security in The New York Times. It is true, as Krugman points out, that Social Security is only a modest part of the fiscal problem. Using statistics from the Congressional Budget Office (CBO), federal spending on health programs and Social Security is expected to grow from 10% of GDP to 16% over the next quarter century. About 1% of that growth is due to Social Security, according to CBO; the other 5% is due to health programs.
The long-term budget outlook for the federal government is bleak. What is surprising is that this is considered news.
The forces driving the U.S.’s long-term budget problem have been known for decades. We’ve also known for years that sometime in this decade, the outlook would begin to worsen considerably. And now it has. And no, the deteriorating fiscal situation has little to do with stimulus spending, bank or auto bailouts, or the wars in Iraq and Afghanistan.
What’s the typical income of a U.S. retiree? $40,000? $50,000? Higher, lower?
It’s $31,157 as of 2008.
That’s the median income of households age 65 and older as reported by Pat Purcell of the Congressional Research Service. The median means that half of older households had a higher income, half lower. Technically, it’s not the income of “retirees,” because it includes the income of older households whether they are fully retired or still working. Still, it’s a good metric of the income of retired Americans.