SEC Commissioner Kara Stein reportedly has warned that “the retirement crisis is a tsunami that is rapidly approaching.”
Stein spoke to the Brookings Institution on Tuesday, giving a talk titled "The New American Dream: Retirement Security," Forbes.com reported.
“We’ve moved from a collective retirement system to one in which each person is expected to go it alone,” Stein said at the Brookings Institution this week in a speech "The New American Dream: Retirement Security."
“The retirement crisis is a tsunami that is rapidly approaching. We can already see it and, indeed, we are starting to feel its effects. Americans are having to work past traditional retirement age,” Stein said.
“And the number of bankruptcies for those over the age of 65 has increased dramatically. The size and speed of the tsunami is likely to increase as it gets closer and closer to us. Our population is aging and the cost of medical care—an important factor for retirees—is increasing. We must address this problem before we are collectively underwater,” Stein said.
Stein also addressed the need for improved financial education, and suggested the SEC might create a model curriculum for schools, create spelling bee-like contests, and create an app, for instance, Forbes.com reported.
To be sure, anything and everything to do with entitlement programs and retirement is seemingly always making headlines and give senior citizens just one more worry to stay awake at night.
The government recently announced that tens of millions of Social Security recipients and other retirees will get a 2.8 percent boost in benefits next year as inflation edges higher. It’s the biggest increase most retired baby boomers have gotten.
Following a stretch of low inflation, the cost-of-living adjustment, or COLA, for 2019 is the highest in seven years. It amounts to $39 a month for the average retired worker, according to estimates released by the Social Security Administration.
The COLA affects household budgets for about one in five Americans, including Social Security beneficiaries, disabled veterans and federal retirees. That’s about 70 million people, enough to send ripples through the economy.
Unlike most private pensions, Social Security has featured inflation protection since 1975. Beneficiaries also gain from compounding since COLAs become part of their underlying benefit, the base for future cost-of-living increases.
Nonetheless many retirees and their advocates say the annual adjustment is too meager and doesn’t reflect higher health care costs for older people. Federal budget hawks take the opposite view, arguing that increases should be smaller to reflect consumers’ penny-pinching responses when costs go up.
With the COLA, the estimated average monthly Social Security payment for a retired worker will be $1,461 a month next year.
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