I mentioned a few weeks ago in Thoughts from the Frontline the statistic I read that 47% of Americans have less than $400 in savings to meet emergencies. Many of those people are elderly. When I was at Rob Arnott’s Research Affiliates conference a few weeks ago, we heard two presentations on the state of the Social Security system, and looked at two approaches to fixing the system. One presentation was by my friend and Boston University professor Dr. Larry Kotlikoff, who has contributed today’s Outside the Box.
It will probably come as no surprise that I would prefer to fix Social Security differently from the approaches that were suggested at the conference; but there’s no disputing that we’re going to have to figure out how to fund $25 trillion, and that sort of money doesn’t just show up as spare change in your sofa.
It should be apparent that more strain is going to be put on the Social Security system. And that is bad for the elderly. About two-thirds of older Americans rely on Social Security for the majority of their income:
Over 60 percent of Americans derive most of their monthly income from Social Security. That is enormous. This is something that is not going to go away but will place additional burdens on those working. Those working are the young and they are in a world full of deep college debt and lower wages. You also have many older Americans working into old age because they simply need additional income. (goldsilver.com)