America’s Retirement Crisis: How Social Security, Student Loan and SNAP Shortcomings All Play Significant Roles
Written by
Vance Cariaga
Edited by
Travis Woods
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The term “retirement crisis” has been tossed around a lot lately, and with good reason. A December survey conducted by Clever Real Estate found that about two-thirds (66%) of retired Americans believe the U.S. is in a retirement crisis because of rising costs, outstanding debt, threats to Social Security and other worries.
Compounding those problems is a lack of adequate retirement savings for many seniors. A 2023 survey from GOBankingRates found that most Americans have less than $50,000 saved for retirement. More than one-third (36%) — including 31% of those ages 65 and older — have less than $10,000 saved. An additional 27% of Americans have between $10,000 and $50,000.
Without a big enough nest egg built up, many older Americans have to work longer just to make ends meet. Nearly 20% of Americans 65 and older were employed in 2023 — up from 11% in 1987, according to a 2023 Pew Research report cited by Business Insider. While working longer brings in needed income for retirees who are struggling to make ends meet, it might also lead to lower benefits from government aid programs.
One of the biggest contributors to the retirement crisis is uncertainty surrounding Social Security, which provides a big chunk of retirement income to millions of U.S. seniors.
The Clever Real Estate survey found that the vast majority of retirees (80%) say the government should do more to bolster Social Security due to the looming depletion of the program’s Old Age and Survivors Insurance Trust Fund. The OASI fund is expected to run out of money in about a decade, leaving Social Security solely dependent on payroll taxes for funding. Those taxes currently fund about 77% of benefits.
“The long-term adequacy of the Social Security system is going to be of paramount importance in terms of just having an income stream for people to rely on,” David Certner, legislative policy director at the AARP, told Business Insider.
Another problem is student loan debt. The average college tuition has more than tripled since the 1960s, according to BestColleges. Tuitions have been on a steady rise since the 1980s, when many boomers started families and had to think about putting their kids through school. Rising tuitions led to a sharp increase in the number and size of student loans.
“I certainly think that this is the first generation of parents retiring who have really taken on a lot of student loan debt,” Geoffrey Sanzenbacher, associate professor of the practice of economics at Boston College and research fellow at the Center for Retirement Research at Boston College, told Business Insider.
Meanwhile, retirees who depend on Supplemental Nutrition Assistance Program (SNAP) benefits to help buy food could see those benefits threatened when they apply for Social Security.
As the National Council on Aging noted, to qualify for SNAP a one-person household must have a gross monthly income of no more than $1,580 and assets totaling no more than $4,250. But because the average Social Security retirement check is about $1,860 a month, according to the Social Security Administration, that income alone might wipe out SNAP eligibility.
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