When this story broke earlier this week, it did not get nearly the attention it deserved, so it bears repeating now: 36 percent of workers, according to one poll, have less than $1,000 saved for their retirement.
That comes from the Employee Benefit Research Institute, which does an annual retirement confidence survey. That has jumped up from 28 percent who reported having less than $1,000 stashed away for retirement last year.
That is one of the statistics that should shut down any conversation about pushing back the retirement age for Social Security or reducing the cost-of-living adjustment for benefits. The idea, often put forward on the right, that people will be able to compensate for benefit cuts with their own savings is not panning out in the real world – and won’t as long as we’re in a slow-growth economy with high unemployment and stagnant wages.
“Cost of living and day-to-day expenses head the list of reasons why workers do not save (or save more) for retirement, with 53 percent of workers citing this factor,” the executive summary of the survey says. And no wonder, given the stagnant wages of the working class the past two decades, which result in 40 percent of the nation’s households today earning less than $39,000 a year.
While many of the people in this group are younger couples who presumably have time to build their savings, only about 11 percent of those surveyed have savings and investments in excess of $250,000. Further, only 17 percent of those who are already retired have more than $250,000 in savings and investments they can tap. Nearly 60 percent have less than $25,000 put away for retirement; almost one in three have less than $1,000.
Much of the reaction to this survey this week has centered on how to improve participation in employer 401(k) plans and other savings vehicles, such as President Obama’s proposal for a “MyRA” plan, an individual savings plan targeted toward lower-income workers that would invest in government bonds.
But these measures will be relatively ineffective unless we have an economy with rising wages and lower unemployment. Nor will these measures eliminate the need to bolster Social Security benefits for those who will be beginning to claim benefits over the next three decades.
It is cruel to suggest pushing the retirement age to 67 or later at the same time the government estimates that more than 40 percent of the long-term unemployed are over the age of 50. It is also wrong to suggest that Social Security benefits should be subject to the “chained CPI,” which would guarantee that the purchasing power of Social Security benefits would erode over time. These workers have had to use their retirement savings to survive in the here and now, and we should be focused on what these workers need to live in dignity – for some, an opportunity to work at a job that will enable them to rebuild their nest egg, for others, access to benefits that will enable them to retire without being in poverty.
What we ought to do instead is move quickly to improve Social Security benefits, and build political momentum for the most important policy change that would make that passible: Lifting the cap on payroll taxes so that wealthy individuals would pay into the Social Security system the same share of their income as working class people.
Help us Prepare for Trump’s Day One
Trump is busy getting ready for Day One of his presidency – but so is Truthout.
Trump has made it no secret that he is planning a demolition-style attack on both specific communities and democracy as a whole, beginning on his first day in office. With over 25 executive orders and directives queued up for January 20, he’s promised to “launch the largest deportation program in American history,” roll back anti-discrimination protections for transgender students, and implement a “drill, drill, drill” approach to ramp up oil and gas extraction.
Organizations like Truthout are also being threatened by legislation like HR 9495, the “nonprofit killer bill” that would allow the Treasury Secretary to declare any nonprofit a “terrorist-supporting organization” and strip its tax-exempt status without due process. Progressive media like Truthout that has courageously focused on reporting on Israel’s genocide in Gaza are in the bill’s crosshairs.
As journalists, we have a responsibility to look at hard realities and communicate them to you. We hope that you, like us, can use this information to prepare for what’s to come.
And if you feel uncertain about what to do in the face of a second Trump administration, we invite you to be an indispensable part of Truthout’s preparations.
In addition to covering the widespread onslaught of draconian policy, we’re shoring up our resources for what might come next for progressive media: bad-faith lawsuits from far-right ghouls, legislation that seeks to strip us of our ability to receive tax-deductible donations, and further throttling of our reach on social media platforms owned by Trump’s sycophants.
We’re preparing right now for Trump’s Day One: building a brave coalition of movement media; reaching out to the activists, academics, and thinkers we trust to shine a light on the inner workings of authoritarianism; and planning to use journalism as a tool to equip movements to protect the people, lands, and principles most vulnerable to Trump’s destruction.
We urgently need your help to prepare. As you know, our December fundraiser is our most important of the year and will determine the scale of work we’ll be able to do in 2025. We’ve set two goals: to raise $125,000 in one-time donations and to add 1400 new monthly donors by midnight on December 31.
Today, we’re asking all of our readers to start a monthly donation or make a one-time donation – as a commitment to stand with us on day one of Trump’s presidency, and every day after that, as we produce journalism that combats authoritarianism, censorship, injustice, and misinformation. You’re an essential part of our future – please join the movement by making a tax-deductible donation today.
If you have the means to make a substantial gift, please dig deep during this critical time!
With gratitude and resolve,
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