The Savings Mirage

Abstract

In the past, we did not worry much about elderly poverty because retirement was short for most Americans – a brief jaunt of post-work life was soon met with death. But with the 100-year life becoming a reality for more Americans, an elderly poverty crisis looms. The American dream of abundant retirement savings remains elusive for many, particularly low-wage workers. While government initiatives emphasize individual responsibility and financial education as a way toward retirement success, the reality is that governmental policies are barriers, including asset limitations that prevent those who receive public benefits from saving. This chapter urges reform in order to ensure the financial stability of the elderly. If we want to focus on individual responsibility for savings, we should repeal asset limitations while providing benefits and structures, early and often, that allow even our lowest-wage workers to save and at a rate that would support them in retirement. Or, social security could be reformed to be truly progressive so that all workers are secure in their golden years. Ultimately, change is needed to circumvent an elderly poverty epidemic