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April 29, 2012 10:46 AM The Social Security benefits are too damn low

By Kathleen Geier

Joe Nocera’s column about how he realizes he can’t afford to retire has deservedly gotten a lot of blogospheric love. I don’t have much to add, other than to echo this comment from the article by economist Teresa Ghilarducci: ““The 401(k) […] is a failed experiment. It is time to rethink it,” and also to point to to a disturbing new study by the nonpartisan Employee Benefit Research Institute (EBRI), which shows that the poverty rate among the elderly is rapidly increasing. The author of the study notes that, “As people age, personal savings and pension account balances are depleted, and as people age, their medical expenditures tend to increase.” And also:


Compounding the problem, the odds of suffering a health condition - acute or otherwise - goes up 45-55 percent for those below the poverty line, he said.

The two recessions that have occurred over the last decade have also contributed to the problem. Also well worth noting is the fact that poverty rates for women are almost double that of men.

As Atrios pointed out, the Social Security benefits are too damn low. Clearly.

Kathleen Geier is a writer and public policy researcher who lives in Chicago. She blogs at Inequality Matters. Find her on Twitter: @Kathy_Gee

Comments

  • Ron Byers on April 29, 2012 12:02 PM:

    Social Security was never intended to be a national retirement plan. It was intended to supplement employer retirement plans and savings. Because of the way it is indexed to inflation it has actually become better than initially intended. While people might argue that social security is too low, it really isn't when you consider what it has successfully kept seniors off the welfare roles as designed.

    That the 401k is a failed experiment and needs to be replaced can't really be argued.

  • ifthethunderdontgetya™³²®© on April 29, 2012 12:15 PM:

    As Atrios pointed out, the Social Security benefits are too damn low. Clearly.

    Unfortunately for us, our Hope and Change President considers them to be entitlements that need to be cut.

    Expect to see those put back on the table when he goes back to seeking a "Grand Austerity Bargain" with the Republicans after the election.
    ~

  • schtick on April 29, 2012 12:18 PM:

    As a person receiving Social Security benefits, I can attest to the fact that it is NOT enough to live on and some of the restrictions make little to no sense.
    I'm diabetic and have developed foot problems, but I can't go to a podiatrist because it is not covered under Medicare and I can't save for it because I'm only allowed to have under $2000 in my bank account or it's taxed. SSI is all I have to live on. I didn't work anywhere long enough to get a retirement. I worked in the age of places closing their doors and moving south, then overseas. Yeah, too bad for me, but I'm not the only one.
    I also get food stamps but every time the cost of living for SSI goes up, my food stamps go down. I now don't get enough in food stamps to keep me in bread and milk for the month. I can't get heap because I rent from my brother so I'm on a budget for fuel oil that takes a big bite out of my benefits every month all year long.
    To those who think I have it "made" on entitlements because YOU'RE paying for them, bullshit. (I'm entitled to my benefits just like you are entitled to the money you have in your bank account.) And for those of you crying because there will be nothing left when you retire, there won't be anything left because those retards in Congress are doing their best to make sure there will be nothing left. If they kept their hands out of SSI along with USPS, those two things would have NO problems. SSI has needed a little tweaking to keep it in line because people are living longer, but they WANT it to go broke.
    People bitch about SSI and buy into the tealiban line that it has something to do with our national debt, but keep mum about all the money Congress GIVES to big business like oil and agriculture.
    That survey of people that watch Faux Fake and BS Newz having no brains was spot on.

  • Roddy McCorley on April 29, 2012 12:40 PM:

    “The 401(k) […] is a failed experiment."

    Like so many things that have made life worse for ordinary people, it's not a failure at all. Retirement is immoral - unless you were born to rich parents. Therefore it makes Baby Jesus cry and must be eliminated.

    Replacing pensions with the 401k is one way of accomplishing that. Stealing the money from pensions is another. Bankrupting the country so that it can no longer afford Social Security is yet another.

    The mission is accomplished.

  • Patrick Star on April 29, 2012 12:53 PM:

    I'm clearly not the smartest guy in the world, but the one smart thing I did was get hired by a union company that offers a respectable pension and health plan, back in my mid-20's. I really didn't appreciate how important a pension was back then, but I'm now 53 and as I approach pension eligibility, I consider myself extremely lucky. The other day, I was talking to an executive who works for a large global electronics conglomerate. He used to work part-time as a student at the company where I work, but quit after he got his degree. He told me he now regrets that decision because his company has been cutting and cutting retirement and health benefits, to the point where they now offer jack s#it, and all he can do to survive is keep working - forever. You can probably multiply his story by millions of Americans by now. Nobody gets pensions anymore, and 401k's are a joke. These are scary times for the baby boomers like myself - too bad they're channeling that anger into the Tea Party.

  • DAY on April 29, 2012 1:01 PM:

    Don't trust others (pension plan, 401(k), Bernie Maddoff) with your money.
    Put the highest amount allowed in an IRA invested in a "retirement balance" fund.

    The trick is to live frugally enough to be able to save any money at all. (Too late for us geezers, so pass the advice on to your heirs.)

  • K on April 29, 2012 1:34 PM:

    401ks can work if your employer cares. I had the good fortune to finish my career at a company with a sufficiently generous match that I regularly bumped into the annual contribution limits. Emphasis on "good fortune". If the Republicans and Blue Dogs really cared about us they wouldn't be trying to cut off the Social Security leg of retirement funding. They'd build a new leg requiring all employers to kick in to all employees 401ks at realistic levels.

  • TCinLA on April 29, 2012 1:46 PM:

    All of the posters above have described a reality I can certainly relate to. Topping it off, the Department if Labor decided in their wisdom this past week that the California economy is so good that there's no further need for the federal extended benefits. A decision made the week my state benefits run out. No wonder EDD wasn't getting back to me about filing for the extension.

    And the result of that is this:

    Friday night I was bitten on the right forefinger by my youngest kitten. She got scared and really bit hard. By last night the finger was red and swollen and my wife insisted I go to the ER. I am with the VA, so went to the West LA hospital. They were very concerned. I've had cats all my life and been bitten, but never like this (take heed here, all you cat people). They pumped me full of antibiotics intravenously and kept me overnight and gave it to me a second time, as well as cut the finger open and drained pus. This morning they wanted to admit me for 48 hours and I had to say no. That's because the ER is free, but upstairs is a copay of $100 (thank you, all you Republican "patriots" who never served a day in your damn worthless lives, for making certain I have "skin in the game" after I served when you refused, you worthless pieces of shit), and I don't have the money. So I am home with a bottle of antibiotics, an appointment at the Sepulveda clinic tomorrow to check my progress, and a lot of hope that the fact the finger looks less red is a good sign of progress.

    Oh, and the "hospital for heroes", where those who "gave their all" for their country are tenderly cared for? We do get good care from some very damn dedicated people, but they can't even get "generic" Kleenex, and the janitorial staff has been cut. It's not the Vietnam-era "snakepit", but if somebody somewhere doesn't start giving a damn (and Pelosi starved the system when she was in, too), it will be.

    I sure do hope the President gets his re-election with all the good economic news coming out of California that they don't have to pay more unemployment to all us "layabouts." Yes indeed, I surely do.

    But all the shaking-the-begging-bowl e-mails are now going on spam block.

  • Tired Liberal on April 29, 2012 2:38 PM:

    The careful and fortunate retiree who saved and accumulated $500,000 to $600,000 in savings could once count on a 5% or greater return that would give him/her income of $25,000 to $30,000 while leaving the principal untouched. That plus a Social Security check provided a stable income that would meet the needs of a modest person who entered retirement without debt or high medical bills. With interest rates held at 1% and below, retirees must make hard choices. Do you chase higher returns with greater risk when you may not live long enough to see them regain their value if they lose? No wonder more elderly people are falling into poverty.

  • Scott Amundsen on April 29, 2012 2:48 PM:

    I paid into Social Security for twenty-five years before a combination of chronic illnesses made it impossible for me to work full time. It took me THREE YEARS to get approved for Disability, during which time I spent all of my savings, every penny in my 401k, and ended up on the streets existing on Welfare and food stamps.

    In the space of less than a year I went from having a good job, a beautiful apartment, a car that was less than a year old for which I had paid cash, and not one penny in debt, to being on the street and getting hounded for years by my former landlord and a credit card that I foolishly resorted to using to try to stave off the inevitable. And when I finally got Disability, well let's just say it pays the rent. Everything else I still need help for, because the slowness of the application process robbed me of everything I had worked for since I was sixteen.

    There is no excuse for that. None.

  • Mitt's Magic Underwear on April 29, 2012 3:24 PM:

    Clearly, what we need to do is toss all the elderly into the private health insurance market, because none of them have pre-existing conditions.

    Then, we can give THE JOB CREATORS more tax cuts!

  • Spring Texan on April 29, 2012 6:39 PM:

    Thanks for saying this. We need to be saying this OVER and OVER and OVER.

    It's just insane the mantra about how we have to cut benefits, which is neither necessary nor inevitable. Yes we need to INCREASE them and we need to find a way, which is PERFECTLY possible.

  • Rick B on April 29, 2012 7:10 PM:

    Actually Social Security was designed as "one leg of a three-legged stool." Social Security was to be the base that everyone got. It provided and still provides a floor. That's one reason you can't lose it in bankruptcy or as payment in a court case. Then came pensions which made up a lot of the rest, and private savings including purchase of your home.

    What's happened is that Wall Street has destroyed pensions and savings for most of us.

    I was a Social Security Claims Rep. I once took a claim from a Lawyer approaching age 65. He had been very successful, and then when he was 58 his wife got cancer. They fought it five years until her death. The lawyer filed bankruptcy and had sold his home, so all he had left was Social Security.

    He mentioned this to me as he filed, and he mentioned how much he had railed against the poor investment that Social Security provided. Then it became all he had left.

  • Bill D. on April 29, 2012 8:37 PM:

    SSI is NOT Social Security. SSI stands for "Supplemental Security Income", a welfare program for the elderly and disabled that's intended to supplement Social Security for those who are poor. SSI was given a name that sounds like Social Security so it would sound like Social Security instead of welfare, but it truly is welfare as it's based on financial need rather than on one's work history. It's also paid for out of the general revenues of the state and federal governments rather than out of the Social Security Trust Fund. Benefit amounts vary from state to state depending on whether and how much a given state supplements the federal contribution to the program.

  • sick-n-effn-tired. on April 30, 2012 7:55 AM:

    I think Tired Liberal nailed it . This is how our parents made it , living off the return from modest blue chip or returns on their savings .
    Us ... not so much .
    You have to have Mittens size wads of cash and a staff of investment advisers to realize any sort of return these day. The average shmoe is fucked , even with a million in the bank.