Income after Retirement
Income after Retirement
Many Americans believe they do not have to save for retirement. Americans believe Social Security will take care of their needs after they retire. With the controversy about Social Security ending, many people are worrying about what they will live on when they retire. Still people are not saving for retirement because they still believe Social Security will be able to pay for all of their needs. Even though Social Security going bankrupt may be because the current economy is down right now, people should still think further and ask if Social Security was set up to fail years ago. We cannot solely rely on Social Security to meet ...view middle of the document...
Many families are struggling financially today; our economy has taken a major downfall. The unemployment rate is at the highest it has been since 1983. “The current unemployment rate is 9.6%.” (BLS online) This has led many people to find cash jobs and not report it to the government. This is tax fraud, but many do not realize they are cheating themselves too. Not reporting the income to the government to avoid paying taxes not only hurts the government, but the person is also not paying taxes into his or her Social Security. If an individual does this most of his or her life, they may not have enough credits to receive Social Security when they want to retire, or even if he or she do have enough credits they may not receive enough money to live on when he or she do retire.
People who currently receive Social Security benefits have not received a cost of living adjustment in the past three years. A cost of living adjustment is an automatic adjustment in benefits that occurs annually. A cost of living adjustment is determined by The Bureau of Labor and Statistics. The bureau evaluates the consumer price index and determines if the cost of living has risen in the past year. Since there has not been a change in the consumer price index according to the Bureau of Labor and Statistics, by law there cannot be an adjustment to Social Security benefits. Many disagree with the Bureau of Labor and Statistics as many have experienced an increase in price in almost everything. With cost of living adjustments made almost every year previously, also leads to wonder how the Social Security Administration planned to cover the extra cost. Social Security benefit levels are modest – only $14,000 a year for the average retiree. The median income for senior households is just $24,000, reflecting just how much Social Security means to most elderly Americans. Many do not know 6 in 10 seniors rely on Social Security for more than half of their income, and about a third of retirees have little other than Social Security on which to live.(K. Palmer 2009, US News)
Finally, look at the birth rate by year in the United States. During the years when the “baby boomers” were arriving on the scene, the early 1950s for example, America saw a birth rate of 25 babies per 1,000 people in the population. By the 1970s this birth rate had dropped to 15 babies per 1,000 people in the population and never recovered. In fact, the current birth rate is the lowest it has ever been – 13.5 babies per 1,000 people. (CDC online) With a large part of the population becoming older and with fewer babies born every year, America has more people reaching retirement age with less people entering the workforce. Currently, for every person entering the workforce, there are two people retiring. That means Social Security is moving to the point of paying more money out of Social Security than what it is receiving because fewer people are joining the workforce to pay into Social Security. With this...