Privatizing Responsibility for Old Age Security 

Extract

Projections of the solvency of Social Security paint a dire picture, with the Social Security Trust Fund reaching empty by 2033. Without additional infusion of funds, retiree benefits will have to decrease by 23% (Folley, 2023). Social Security, of course, was never intended to be one’s sole source of retirement income, and in reality, average payments are quite modest. Without legislative action, the consequences of cuts in payments could be drastic for many recipients. Other important pillars supporting economic security in old age are private retirement plans, personal savings or inherited wealth, home equity, and property income. Today, a major question has to do with the adequacy of those pillars of support. Clearly, the longer one can stay employed and the more sources of income one has the better off one will be in retirement. Yet many Americans have little, and in some cases nothing, saved for retirement, and many have no private pension or other sources of income in retirement. Moreover, employment opportunities for those with less education are narrower at older ages. Automation and age discrimination contribute to a lower labor demand for older low-skilled workers. As a consequence, older low-skilled workers who experience job loss are less likely to be reemployed (National Academies of Sciences, 2022).

The full study can be viewed at Public Policy & Aging Report.

Angel, J. L., Angel, R. J., & Aguila, E. (2023). Privatizing Responsibility for Old Age Security. Public Policy & Aging Report, prad033.