Is America Really Headed for a Retirement Security Cliff?

Andrew Biggs’ latest tweet:

In modesty, I say that journalists covering retirement issues would really benefit from watching this discussion.

For those two, wherever they may be (if they exist at all), here is that discussion with my comments below.

This basically comes down to Teresa Ghilarducci saying there is a crisis and Andrew Biggs saying there isn’t.

If there is a crisis then Ghilarducci seems to be leaning toward governments providing more retirement savings vehicles. The problem with that is governments, at all levels, have proven they can’t be trusted with money, even if it is supposed to be in a trust, as Biggs explains:

Another interesting segment is on the demise of defined benefit plans:

Based on the latest 990 filing for the Alliance for Retirement Income I can’t tell who is backing this effort but Jean Statler’s retirement looks secure:

5 responses to this post.

  1. Posted by Stephen Douglas on October 31, 2021 at 1:42 pm

    Biggs seems to be saying that the average retiree is doing okay. Better, in fact, than twenty years ago. Also, the median retiree or the “typical” retiree, whatever that is.

    Which may or may not be true, depending on which data and assumptions you use. Even among government studies, the data is conflicting.

    Government Accountability Office

    Bureau of Labor Statistics’ National Compensation Survey,

    (faulty) Current Population Survey

    https://www.forbes.com/sites/andrewbiggs/2019/03/27/no-half-of-older-americans-arent-without-retirement-savings/?sh=5502f160e664

    Also a significant difference when discussing individual income vs. household income.

    Ghilarducci is not disagreeing, it seems, but saying that is no solace to the bottom 10-20 percent of retirees, living on (lower than average) Social Security alone. Biggs does agree, finally, in the last few minutes of the video, that there should be a (much) more substantial minimum benefit.

    The overall problem is that, working or retired, the U.S. has among the greatest income disparity of all the OECD countries. Biggs says the lowest ranks have an 88 percent SS replacement rate, which is considered great by most economists.

    It is great if your pre retirement income is $120,000. Not so great, according to Ghilarducci, if your income is $20,000.

    In a previous article, Biggs actually said yes, the lowest ten percent of retirees are poor, but they’ve always been poor. They’re used to it.

    Reply

  2. Posted by geoxrge on November 2, 2021 at 7:37 am

    Puerto Rico board says bond deal will collapse without court OK’ing pension changes
    https://www.bondbuyer.com/news/puerto-rico-board-says-bond-deal-will-collapse-without-court-oking-pension-changes

    Will Puerto Rico’s debt-restructuring deal end the largest bankruptcy in U.S. history?
    Nicole Acevedo and Gabe Gutierrez 3 days ago
    https://www.msn.com/en-us/news/us/will-puerto-rico-e2-80-99s-debt-restructuring-deal-end-the-largest-bankruptcy-in-us-history/ar-AAQ6Ef1

    How US-imposed austerity and privatization schemes are crushing Puerto Rico

    @14:45 Frances Haugen, the Facebook ‘whistle blower’, moved to PR for tax reasons, according to her, with her crypto currency friends. I vote PR the best new location to flee NJ to.

    Reply

  3. Posted by Ray Shorter on November 3, 2021 at 11:53 am

    Must be slow news cycle on Pbgc SFA applications, approvals should be happening by now. It takes 4 months to decide a insolvent pension fund needs help? Would help if these funds restored benefits now.

    Reply

    • Posted by geoxrge on November 3, 2021 at 7:53 pm

      “approvals should be happening by now.” I wonder what happens if there is an approval. Do they issue a treasury check for the full amount immediately on approval? As far as I know no money was ever appropriated for this program but there is a mandate that a check be issued on approval.

      Reply

      • Posted by Ray Shorter on November 3, 2021 at 9:01 pm

        If a fund has enough money to last another 3 years, it should have enough money to restore benefits for about 6 months when SFA money is deposited. Information on these subjects is right up there with information on weapons of mass destruction.

        Reply

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