Retirement Confidence Index

I don’t put much stock in surveys, especially when it comes to people and their money and healthcare. But I couldn’t resist this one.

I was intrigued by the first finding, no doubt stimulated by political rhetoric and misinformation.

Key Findings

71% of Americans aged 70+ are concerned about Social Security drying up – up from 29% in July and 54% in September.

43% of Social Security beneficiaries now worry about outliving their savings in retirement.

47% of Americans experienced an attempted Social Security scam in the last 3 months.

74% of workers now plan to work in retirement (up from 65% in May) – a pandemic high. 19% of people in their 50s now plan to work full-time in retirement (over double the reported 8% in May).

Nearly half of people laid off or furloughed due to COVID-19 saved $0 for retirement in the last year – up from 27% in September.

29% of 401k holders are now planning to withdraw early from that account to pay the bills  – a pandemic high.

34% of Americans are now planning to change their investment strategy to keep more in cash accounts.

56% of Americans are willing to risk getting COVID in order to work, including 35% of seniors (60+).

Source: SimplyWise Retirement Confidence Index | SimplyWise

12 comments

  1. There has been talk from the progressive side saying they would like to make SS lat rate, rather than basing it on what the recipient contributed. The current progressive award of benefits compared to contributions is bad enough without flat rate.

    Liked by 1 person

  2. But that first finding is, in fact, accurate. It reflects the reality of senior’s feelings – what they have been repeatedly told. It opens the door to radical solutions. It is how elites get commoners to accept new mandates. It is how elites use entitlements (the threat of reduction, or the promise of “more”, “more” from someone else’s taxes) to buy votes.

    Congress COULD allow for a 25+% across the board cut in benefits as soon as 2032 – but they WON’T do that.

    Instead, they MAY use use this as an opportunity for wokeness – introducing a new form of “equity”.

    Assuming Congress delays for a few more years until we are in crisis mode. Then, they COULD move in the direction of significant increases in the progressivity of the formula and taxation. For example, it would not surprise me to see them institute a new minimum benefit at perhaps the poverty level, raise up benefits for those already retired to that level (buying votes), and reduce benefits for retirees who paid in dramatically greater taxes than the benefits they were scheduled to receive (arguing that many of those are the same people who disproportionately benefitted from “structural racism”). They could either do this directly, or by increasing the taxation of benefits. However, I’m thinking they could change the earnings test and deploy the 2 for 1 offset beyond wages, to consider all income, from whatever source derived, reducing benefits down to the poverty level minimum.

    Then we will have the desired “equity” that wokeness demands – all retirees will receive “equal” social security benefits, but at the poverty level. My guesstimate is that, with such changes, President-elect Biden can effect the benefit increases he wants (and more) yet limit obvious, direct tax increases to those households with earnings > $400,000. He will euphemistically call the reduced benefits/increased taxation something else – perhaps the New, Improved Social Security Formula for the 21st Century … yada, yada, yada … then head back to the basement of the White House.

    So, my bet (and I am soon to be 70 myself) is that we will achieve “solvency” by changing taxes and benefits so that there is even less relationship between the taxes we pay and the benefits we receive – a la Medicare Hospitalization Insurance, where, an individual could pay as little as $745 IN TOTAL over a ten year period ending in 2020 and receive non-contributory Medicare Part A for himself and his spouse avoiding a MONTHLY premium of $942! Others who have paid in over 50+ years (myself included) will receive exactly the same benefit.

    Similarly, in Part B and Part D, that same low wage individual not only avoided federal and state income taxes, he and his spouse will be “Dual Eligible”, receiving the other Medicare coverages without any premium, and without any deductibles or copays. While individuals who paid in hundreds of thousands of dollars paid federal income taxes that funded other’s Part B and Part D premiums (the part beneficiaries do not fund), and, will also have to pay their own premiums (and potentially IRMAA as well) as well as point of purchase cost sharing – deductibles, copays, etc.

    Get ready for some “equity improvements.”

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    1. I’m all ready for these equity improvements. Many of us do not think current income disparity is very fair, and will not weep to see the advantaged in our society take an extra income hit. They (we) can easily afford it.

      Liked by 1 person

    1. These numbers looked funny to me as the way things jumped around when in real day-to-day terms nothing changed during that period. Social security has been reporting reduced payout around 2032-2035 for over a decade that I know of and nobody has been listening. I assumed that social security was not going to be around when I started working in 1977. The politicians have been promising seniors more and bigger COLAs so why are senior worried now?

      I tried to find their methodology and their questions to determine why people would change their mind so radically. SimpleWise looks to be a bunch of computer whizkids, with barely any financial planning background, funded by two venture capital groups instead of senior lobbying groups. I wonder what their real motive is? Is it to get senior’s investment money or to make money off lobbying the government for senior groups?

      Liked by 1 person

      1. Republicans are such moralists, totally concentrated on how poorer people are getting money they don’t deserve. The right-wingers are themselves okay, but extending a helping hand to people who are not doing well — well, they just hate the idea, unless a few of their ilk get praise for wondrous magnanimity. I find Republicans obnoxious and self-righteous, largely.

        Liked by 1 person

      2. Social Security was never intended to be a welfare system. If that is what folks want to create, well, you should those who have paid FICA and FICA-Med taxes for the last 50+ years to be just a little critical regarding changes made once they are in their 70’s.

        FDR, who the D’s all aspire to outdo these days, set up the SS system so that workers would finance the benefits for those who are retired. It was never intended to be a retirement system. It was never intended for you to fund your own benefits. However, it wasn’t intended to be a welfare system, either. No, it was intended to be an entitlement system funded with “contributions” from wages. Another euphemism.

        The best result would be to make the existing SS and HI systems sustainable. Then, if Congress wants to do more, put that in a separate welfare or entitlement system and fund it with taxes on “the rich” – however you want to define that.

        This isn’t an R or a D issue, it is a taxpayer versus “all-but-free-rider” issue. I remember the D’s being so damn worried to hell about “free riders” when they added the individual mandate to the Patient Protection and Affordable Care Act of 2010, and their massive and loud defense of PPACA and the individual mandate in the run up to the 2020 election – re: California v. Texas. See: https://www.forbes.com/sites/theapothecary/2011/02/02/myths-of-the-free-rider-health-care-problem/?sh=40a75c0b2ad9

        I guess “free riders” aren’t an issue for D’s if the intended beneficiaries all vote for D’s – the D’s are the “free stuff” party – free college, free universal pre-K, free rent, universal basic income, etc.

        The R’s definitely suck (look at Trump deficits, etc.), however, the D’s coming into the administration and in Congress want to make him look like a miser when it comes to spending and deficits.

        Liked by 1 person

      3. There is a big difference between working to get ahead under a libertarian capitalist state than expecting the government to provide everything in a welfare socialist state. I’ll take my freedom and my right to earn as much as I want to over expecting the government to take what I want from others. Why is it so wrong these days not to be responsible for yourself? Why is it wrong wanting to be productive for society instead of a burden? Why is it wrong to want to get ahead and have nice things that I earned instead of taken from others?

        I believe in charity and government welfare for the poor who have nowhere to sleep or no food to eat, not for people to pay for cable TV , iPhones, and cars.

        Life is full of choices. I finished school, stayed married, worked hard, saved for retirement and now I should pay for others by giving my money to the government to redistribute my wealth that took me a lifetime to earn? If that makes me obnoxious and self-righteous, then I guess I’ll have to start taking that as a compliment and say thank you.

        Soon, I guess that statues of JFK will be torn down because he said “ask not what your country can do for you, ask what you can do for your country” and that makes him an anti-socialist.

        Liked by 1 person

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