Retiring comfortably at 65 is now out of reach for millions of
Americans. Tom Coomer was a machinist at the aerospace manufacturer
McDonnell Douglas for 29 years, but the plant closed one year before he
was due to get his full pension. Now 80 years old, he works as a greeter
five days a week at a Walmart in Oklahoma.
While Coomer and his wife have downsized their lifestyle, it’s still hard for them to make ends meet. They’re just two of nearly 10 million Americans still working past the age of 65.
According to CBS News business analyst Jill Schlesinger, Americans are facing three main obstacles to retirement. They’re living longer, median wages have stagnated over the past 20 years and a shift from pension plans to 401(k)s have all put a burden on employees.
We live in a divisive time, where the president of the United States
focuses on our differences instead of our common humanity. Though Dr.
Martin Luther King was controversial, he sought to unite us, to appeal
to our better angels. Dr. King believed strongly in the dignity of all
of us. He understood that we are all created equal.
Because of these beliefs, he pushed not just for racial justice, but
for economic justice, understanding that they are inextricably linked.
He worked tirelessly for worker security, economic equality, and social
Indeed, when Dr. King was assassinated in Memphis, Tennessee, he was
there to support sanitation workers who were on strike for decent wages,
safer working conditions and the recognition of their union. For weeks
before his death, he spent time planning a Poor People’s March on
Three years before his assassination, he gave a sermon in the Ebenezer Baptist Church in Atlanta, Georgia, in which he said:
“[In the 1963 ‘I Have a Dream’ speech,] I tried to tell the
nation about a dream I had. I must confess to you this morning that
since that sweltering August afternoon in 1963, my dream has often
turned into a nightmare; I’ve seen it shattered… I’ve seen my dream
shattered because I’ve been through Appalachia, and I’ve seen my white
brothers along with Negroes living in poverty. And I’m concerned about
white poverty as much as I’m concerned about Negro poverty.
“So yes, the dream has been shattered, and I have had my
nightmarish experiences, but I tell you this morning once more that I
haven’t lost the faith. I still have a dream… I still have a dream
this morning that truth will reign supreme and all of God’s children
will respect the dignity and worth of human personality. And when this
day comes the morning stars will sing together and the sons of God will
shout for joy.”
Dr. King was focused on the poorest among us. Consistent with King’s
concerns, Social Security is the nation’s most effective anti-poverty
program. But, unlike means-tested programs, Social Security is designed
not just to alleviate poverty, but to prevent working families from
falling into poverty in the first place.
The values embodied in Social Security are Dr. King’s values and
beliefs. Indeed, they are basic American and religious values. Among
those values are that it is our birthright as human beings to have
dignity, freedom and independence; that we have responsibilities and
concern for ourselves, our families, and our neighbors; and that we are
all connected, sharing the same risks and benefits.
There are some who seek to divide us along all sorts of fissures.
They can be seen at work in their lies about Social Security. They try
to convince us that Social Security benefits earned by and paid to
seniors are harming our children. They tell us that Social Security
benefits earned by and paid to those with disabilities are harming
seniors. They claim that Social Security is unfair to African Americans,
young people, women—indeed every demographic group for which they can
manufacture a case.
None of those charges about Social Security’s supposed unfairness are
true. Social Security is essential for all generations of families. It
is essential to every race and gender. It is essential to families where
a worker dies prematurely, becomes seriously disabled, or lives to age
100 or beyond.
Fortunately, the American people recognize the importance of Social Security and value it. Numerous current and past polls show that the overwhelming majority of Americans value Social Security, recognizing that it will be more important in the future. For that reason, they oppose cutting its modest but vital benefits and would like to see it expanded.
The record number of women legislators on Capitol Hill could have a positive impact on women’s retirement security. More than 100 women were sworn into office as members of the U.S. House last week.
This new “sisterhood” of
lawmakers brings a stronger female perspective to the nation’s
retirement challenges — which disproportionately affect women — and
the possibility of reversing long-term trends that will decrease women’s
financial stability during their senior years.Historically,
women have had fewer assets and income in retirement, and depend more
heavily on Social Security to make ends meet. The ongoing gender pay gap
– and time away from the workforce caring for family — diminish women’s
Social Security retirement benefits. In 2018, women’s average monthly
benefits were 21 percent lower than
men’s. At the same time, women’s greater longevity means their
retirement dollars must stretch over a greater number of years.
As mothers, caregivers, and members of the workforce, most women of the 116th Congress understand these critical issues and are well positioned to affect change. Elle magazine described some of the incoming lawmakers as “women who can’t afford their rent until their new job starts… women who look nothing like Mr. Smith, and who are revolutionizing Washington.”
Boosting Social Security and Medicare benefits would go a long way toward improving women’s retirement security. But there is even more to be done.
Real Estate, Food Services, Health Care, and Retail Sectors See Biggest Employment Impacts
Defined benefit (DB) pensions are a substantial contributor to the U.S. economy, according to a new report. Retiree spending of pension benefits in 2016 generated $1.2 trillion in total economic output, supporting some 7.5 million jobs across the U.S. Pension spending also added a total of $202.6 billion to government coffers, as taxes were paid at federal, state and local levels on retirees’ pension benefits and their spending in 2016.
“The analysis shows that virtually every state and local economy across the country benefits from the spending when retirees spend their pension benefits,” said Diane Oakley, NIRS executive director. “Pension expenditures are especially vital for small and rural communities where other steady sources of income may not be readily found if the local economy lacks diversity.”
For example, when a retired nurse receives a pension benefit payment, s/he spends the pension check on goods and services in the local community. S/he purchases food, clothing, and medicine at local stores, and may even make larger purchases like a car or laptop computer. These purchases, combined with those of other retirees with pensions, create a steady economic ripple effect. In short, pension spending supports the economy and supports jobs where retirees reside and spend their benefits.
This study finds that in 2016:
$578.0 billion in pension benefits were paid to 26.9 million retired Americans, including:
$294.7 billion paid to some 10.7 million retired employees of state and local government and their beneficiaries (typically surviving spouses);
$83.0 billion paid to some 2.7 million federal government beneficiaries;
$200.3 billion was paid to some 13.5 million private sector beneficiaries, including:
$41.8 billion paid out to 3.5 million beneficiaries of multi-employer pension plans, and
$158.6 billion paid out to 10.0 million beneficiaries of single-employer pension plans.
Expenditures made out of those payments collectively supported:
7.5 million American jobs that paid nearly $386.7 billion in labor income;
$1.2 trillion in total economic output nationwide;
$685.0 billion in value added (GDP); and
$202.6 billion in federal, state, and local tax revenue.
Defined-benefit pension expenditures have large multiplier effects:
Each dollar paid out in pension benefits supported $2.13 in total economic output nationally.
Each taxpayer dollar contributed to state and local pensions supported $8.48 in total output nationally. This represents the leverage afforded by robust long-term investment returns and shared funding responsibility by employers and employees.
Pensionomics 2018: Measuring the Economic Impact of Defined Benefit Pension Expenditures, was released today by the National Institute on Retirement Security. The full report is available here. A map with downloadable state fact sheets is available here.
The 116th U.S. Congress is already
historic. It reflects the diversity of our country better than any previous
Congress, with the highest numbers of women and people of color in history.
Nancy Pelosi, the first and only female speaker of the House, has regained her
gavel. New members include the first ever Native American Congresswomen, Muslim
Congresswomen and the youngest Congresswoman in history.
This Congress is poised to make history on policy, as well. It will make
significant strides in the fight to expand Social Security and Medicare. The
incoming chair of the Social Security Subcommittee, Representative John Larson
(D-CT), has told Social Security supporters that he will hold hearings on
expanding Social Security early in the new Congress. And, on the first day of
this new Congress, House Democrats announced that they will be holding
hearings on Improved Medicare for All as well.
These hearings are a major development. They will mark the first time the
House of Representatives has held hearings on expanding Social Security in
almost half a century and the first time ever on improving Medicare and
expanding it to cover all Americans. (Three-quarters of a century ago, the
Senate, but not the House, held hearings on a national health insurance bill.)
The fact that the most diverse Congress in history will be prioritizing
these issues, which are important to all of us, but especially to women and
people of color, is no coincidence. Representation matters.
Expanding Social Security and improving Medicare and expanding it to everyone represent the strong will of the people. Indeed, in the lead-up to November’s election, two out of three voters said that they were more likely to vote for a candidate who favored expanding, not cutting, Social Security and nearly the same percentage, 64%, said that they would be more likely to vote for a candidate who favored expanding Medicare. Not surprisingly, virtually all of the new members ran on expanding Social Security and Medicare.
A new data analysis by ProPublica and the Urban Institute shows more than half of older U.S. workers are pushed out of longtime jobs before they choose to retire, suffering financial damage that is often irreversible.
Tom Steckel hunched over a
laptop in the overheated basement of the state Capitol building in
Pierre, South Dakota, early last week, trying to figure out how a newly
awarded benefit claims contract will make it easier for him do his job.
Steckel is South
Dakota’s director of employee benefits. His department administers
programs that help the state’s 13,500 public employees pay for health
care and prepare for retirement.
It’s steady work and,
for that, Steckel, 62, is grateful. After turning 50, he was laid off
three times before landing his current position in 2014, weathering
unemployment stints of up to eight months.
When he started, his
$90,000-a-year salary was only 60 percent of what he made at his
highest-paying job. Even with a subsequent raise, he’s nowhere close to
matching his peak earnings.
Money is hardly the only trade-off Steckel has made to hang onto the South Dakota post.
He spends three weeks of every four away from his wife, Mary, and the couple’s three children, who live 700 miles away in Plymouth, Wisconsin, in a house the family was unable to sell for most of the last decade.
With Christmas approaching,
he set off late on Dec. 18 for the 11-hour drive home. When the holiday
is over, he’ll drive back to Pierre.
“I’m glad to be employed,” he said, “but this isn’t what I would have planned for this point in my life.”
Many Americans assume
that by the time they reach their 50s they’ll have steady work, time to
save and the right to make their own decisions about when to retire.
But as Steckel’s situation suggests, that’s no longer the reality for many — indeed, most — people.
Social Security is unaffordable due to our aging population. Social Security is a driver of our national debt. Social Security is built on a house of cards – its assets are just IOUs. Social Security is a Ponzi scheme.
No doubt you have heard some or all of these claims from politicians and pundits debating solutions to the problems of our most important retirement program.
But Nancy Altman argues that these claims are not just wrong, but part of a purposeful campaign to undermine and dismantle Social Security that has been underway since its creation in the 1930s. Altman makes her case in a provocative, highly informative new book, The Truth About Social Security: The Founders’ Words Refute Revisionist History, Zombie Lies, and Common Misunderstandings.