At Work

Only the privledged few can retire?

“Only the privileged have access to a secure retirement,” says Theresa Ghilarducci, a labor economist at the New School for Social Research. (Star-Ledger, November, 28, 2016)

Consider this:

If only the privledged can have a secure retirement then nobody but the privledged should be retired. Virtually every American has either Social Security or a government pension. In many cases that is only a foundation of what is needed. However, except for truly poor Americans, everyone can modify their lifestyle to save for retirement. That is because money is spent routinely on non essential items. 

You can argue with my logic, but until all retail shops, beauty salons, nail salons and restaurants, sports venues, theaters and concerts all shut down, I must be correct. It is not the privledged who are keeping this part of our economy going. 

Lower income Americans may have more of a challenge, but they also have less to accumulate because Social Security replaces more of their income. 

It all comes down to two basic alternatives; save 5-6% of your income and invest wisely or have that amount taxed and increase the Social Security benefit. Higher income workers must save even more to reach a reasonable replacement percentage. 

Americans need to make a decision before it really is too late. 


4 replies »

  1. See no reason why a choice not to save beyond social security is an issue – so long as folks willing to live near poverty line. Age 65+ in poverty dropped from 30+% in the 1960’s, 1970’s to only 10% today. So it goes back up – isn’t that the choice the individuals who failed to save made? Why should we second guess their decision to live in poverty during their retirement years?


  2. I don’t understand the choice you posed. Importantly, I agree that the choice is for each American to make. I have been ultra critical of Professor Ghilarducci’s proposals to have the federal government step in and facilitate retirement planning concepts that put future taxpayers at even greater risk – such as her proposal to have taxpayers guarantee a real rate of return of 3% on mandated savings. My response is simple, make that guarantee on my Social Security contributions first – then we can talk about greater taxation for retirement.


    • The choice is either save yourself and invest for the long term or increase the SS payroll tax to 5-6% to make it sustainable while increasing the benefit. The problem is that there are way too many Americans who can’t or won’t make the choice to save themselves and I don’t see that changing, in fact I see it getting worse so where does that leave us?


      • I am not sure everyone can save for retirement but I do believe that mostly everyone could save for an emergency fund to keep them away from having to abuse credit cards and payday loans which would prevent them from ever retiring. I agree that the savings rate is too small.

        However I would like to point out those all retail shops, beauty salons, nail salons and restaurants, sports venues, theaters, fast food restaurants are the ones employing those minimum wage workers in this service economy. Since there is no more middleclass manufacturing jobs left then I guess if people stop spending at these non-essential places, they will not have jobs to save money from.


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