Fiscal Outlook Critical for Retirees

A new study warns that American retirees may not be financially prepared for their golden years. The data show that Social Security doesn't currently cover half of living expenses in 45 states and Washington, D.C.

In addition to this conclusion from HowMuch.net's study, the Social Security benefit program's trust fund is expected to run dry by the 2030s, which will require cuts to monthly benefits. Compounding this concern, workplace-defined benefit plans like pensions are being replaced with employer-sponsored 401(k) and IRA account plans with defined contributions, but less than half of employees in the private sector had access to such plans in 2016, MarketWatch reports. In 1999, 64 percent of workers in the sector had access. Nearly one-third of Americans (29 percent) have no retirement savings, according to the Government Accountability Office.

Now, Social Security was never meant to be a recipient’s only income. It was signed into law in 1935 by President Franklin Roosevelt, and was created as a safety net for people who had no other support. Workers pay into Social Security through paycheck deductions and when they become eligible, the government makes distributions. There are currently 43.2 million retired workers receiving Social Security benefits, with an average monthly check of $1,414.73, according to July 2018 data from the Social Security Administration.

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