In contrast to a recent column suggesting American retirees are doing just fine on the road to retirement, letters to The Wall Street Journal indicate otherwise.
Andrew Biggs’ and Sylvester Schieber’s Sept. 29 column, “The Imaginary Retirement-Income Crisis,” stirred a heated discussion among WSJ readers, who wrote in to tell the writers that their conclusion was drawn from a “single cherry-picked number from one chart from a 365-page report.”
This particular message came from Norman Stein, of the Thomas R. Kline School of Law at Drexel University. Stein adds, “In contrast to the 2004 and 2013 polling data cited by Messrs. Biggs and Schieber, an April 2014 Gallup poll found that having enough money in retirement is the biggest financial worry for most Americans of all ages, but particularly for those aged 30 to 64.”
Biggs and Schieber cite a chart in their column indicating that, on average, U.S. retirees have an income equal to 92% of the average American income.
However, the latest data from the American Community Survey show that the median income of U.S. retirees is less than $16,000, compared with that of the median American worker, at $31,000 — “hardly 92%,” write Joelle Saad-Lessler, Ph.D., and Teresa Ghilarducci, Ph.D., of The New School for Social Research in New York.
Stein contends that the column’s authors are accusing politicians of creating a retirement income crisis to increase Social Security benefits and to fend off efforts to make deductions for 401(k) plans more equitable.
“In reality, the authors are pretending that the crisis doesn’t exist so that they can push for cuts to Social Security and undermine more inclusive retirement solutions,” Stein writes.
But the same chart referenced by the authors shows that, by age 75, American retirees’ income slips to less than 80% of the national average.
In addition, the latest data from the Federal Reserve’s Survey of Consumer Finances show that the median retirement account balance for all American households was zero in 2013, writes Diane Oakley, executive director of the National Institute on Retirement Security.
The share of households with assets in retirement accounts continues to drop, from 50.4% in 2010 to 49.2% in 2013. Among working-age households age 25 to 64, the median retirement account balance fell to $2,500 in 2013 from the already troubling level of $3,000 in 2010.
“Survey after survey shows that retirement security is among the top worry for Americans,” Saad-Lessler and Ghilarducci write. “If things were as rosy as Mr. Biggs and Mr. Schieber state, why is everyone so afraid?”
Written by Emily Study