Social Security: While Future ‘Retirement Crisis’ Could Be Greatly Embellished, Worries Persist

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A recent Forbes article by Andrew Biggs took the editors of Bloomberg to task for claiming that the U.S. is facing a pending and dire “retirement crisis,” which could “under reasonable assumptions” overwhelm state budgets.

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Biggs, however — an expert on retirement policy and public sector pay — calls the assumptions “anything but reasonable.”

Many studies, including the most recent Federal Reserve Survey of Consumer Finances, find that most Americans aren’t saving enough for retirement, GOBankingRates reported recently. The Federal Reserve Survey of Consumer Finances from 2019, the most recent data available from the Fed, found that Americans age 55 to 64 have just $134,000 in their retirement accounts.  

However, Biggs said that some projections from government agencies show that “poverty in old age is falling.”

Bloomberg cited another survey, from AARP, which showed that welfare benefits for New Jersey seniors could rise to as much as $10.5 billion by 2030. The study, however, started with evaluating New Jersey residents’ income and assets from 2008, Biggs wrote.

Biggs said that the study doesn’t take into account rising salaries, which would be reasonably expected as people get older and advance in their career. The study also evaluated income that would be expected to be drawn from traditional pensions — not other investments. The study also didn’t factor in additional investments made after 2008.

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For instance, the Fed study showed that people under the age of 35 have just $13,000 in savings, but that number rises as they age, advance in their careers, continue saving, and see their investments compounded for growth.

Biggs pointed to one study from the Social Security Administration’s Office of Policy indicating that only 4% of all retirees will fall below the poverty line by 2050. In 2022, roughly 5% of Americans aged 65 or older fell below the poverty line.

That’s not to say you should take retirement savings lightly. On average, most Americans will need roughly $1.1 million to retire, TheStreet recently reported (based on a survey from U.K.-based investment firm Schroders).

In the study, 3% of retirees said they are “living the dream.” The remaining retirees polled either said they were “comfortable” or “not great, not bad,” with a 50/50 split between the two sentiments.  

Of course, there’s a big gap between doing “not bad” and living in poverty. Certainly, Americans need to be focused on saving more rather than counting on government funds to sustain them in their later years.

Retire Comfortably

A 2021 annual report from the Social Security board of trustees found that the department’s cash reserves could be fully depleted by 2034 unless steps are taken to increase revenue or cut costs. Cost-cutting measures could, in a worst-case scenario, involve cutting benefits. Experts expect Congress will step in — as it has in the past — to find a solution, GOBankingRates reported.

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If you’re concerned about retirement at any age, it’s a good idea to speak with a financial advisor to discuss your best options in terms of increasing your savings.  

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.
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