You’re probably familiar with AARP and its advocacy for retired Americans. But there’s another lower profile non-profit foundation, the Transamerica Center for Retirement Studies ®. TCRS in its own words “is dedicated to educating the public on emerging trends surrounding retirement security in the United States.”
The latest TCRS study is its 20th annual retirement survey of workers. We’d like to highlight two very important concerns expressed by Baby Boomers.
Baby Boomers, for a variety of reasons ranging from the shifting retirement landscape brought on by 401(k) and similar plans in the midst of their working careers, have found themselves in a quandary. They haven’t had the 40-plus years to accumulate 401(k) savings and were hit hard, not only by the 2008 recession, but also by the recent pandemic.
Consequently, many Baby Boomer workers, according to the report, plan to work to older ages than their parents. Unfortunately, only a few have a backup plan if forced into unexpected retirement. The double whammy is that amid the pandemic, even now Baby Boomers face greater health and employment-related risks than younger workers.
Which leads us to the first important finding: Boomers are worried about outliving their savings and investments. In the survey, 45% named this as their greatest fear. The better news is that a significant majority of Baby Boomers (66%) “use their financial advisors for retirement investment recommendations.”
A slightly higher share of Baby Boomers — 46% — said their biggest worry is about their Social Security entitlements. They worry that the benefit could be curtailed, reduced, or simply go away. That fear is shared across generations, but less so by younger generations with Generation X and Millennials citing that concern at a percentage of 39 and 36 percent respectively.
Significantly, many (37%) Baby Boomers “expect to rely on Social Security as “their primary source of income in retirement. But across generations, 73% of workers surveyed agree with the statement, “I am concerned that when I am ready to retire, Social Security will not be there for me.”
The key phrase here is “ready to retire.” Analysts agree that the only way to carry Social Security solvency past its current 2030 estimate is to either raise the retirement age, lower the benefits, raise the payroll taxes — or some combination of the foregoing.
Then there’s another sly and uniquely tax-and-spend solution that only a welfare state can conjure: The government can raise the top income tax on Social Security benefits from its existing 85%. Also, they could quietly raise the 2021 wage cap on Social Security payroll deductions from its current $142,800.
The Social Security Trust fund was once solvent. That was until government budgeters began raiding the excess to pay for the mess begun with Lyndon B. Johnson’s war on poverty and the fuzzy math of “a unified budget.”
Unfortunately, these concerns are not unwarranted…
