Median Net Worth Report - America's Elderly - Social Security

[taquinas101]

I am not sure what social security will look like after the latest attempts to abrogate, er reform it. However, looking at the median net worth of Americans, particularly folks over 55, makes clear that most Americans are in poor position to retire without the assistance of social security.

The median net worth of all American households headed by someone over 65 is $108K. However, if you take away home equity, the figure falls to only $23K, which is not much to retire on without the benefit of social security.

Looking at the report below, most American households simply do not save enough to retire based on their own accumulated capital, which is the problem I see with switching away from paying current benefits with current receipts. To add an additional "market based" risk factor compounds the uncertainty.

The link to the Census report is attached below.

http://www.census.gov/prod/2003pubs/p70-88.pdf

[rogerashton]

1. Many Americans are never going to be able to retire.

Because SS is not really enough.

And the real crunch comes when they are too infirm to continue to work -- lose their jobs and thus their health insurance. As things stand, there is medicare and medicaid -- but that's where the real cost crisis is, and how much longer will our rulers allow medicare and medicaid to continue?

So what does a 70-plus who cannot afford to retire, becomes ill, loses her job and thus her health insurance, do if there is no SS and no Medicare?

If she has children, she bankrupts them. If not, she dies.

Those of you between 25 and 50, who have living parents: de te fabula.

[taquinas101]

3. AARP Provides A Good Explanation Of The Faults of the Bush Plan

Bush's push on social security once again amazes me as to why so many Americans support him. Even the AARP is strongly against the proposed privitization of social security.

http://www.aarp.org/socialsecurity

[whistle]

2. Any pension program that is based on long term capital gains

...in risky ventures such as stock market investments, real estate speculation and so forth, can not possibly be relied upon as a program for all of the elderly either for the present time or in the future. There will be winners most certainly, but the numbers of losers will far out number the winners and it will be based on essentially blind luck or participation in privileged groups!

Social security was a measure legislated in the 1930's by FDR to provide one very critical safety net to the general public, when the very best minds of that time could see the flaws, fallacies and out-right fraud of an economic system, laissez faire/free market capitalism, that if left to the lunacy of believing and practicing it's own principles and theories, would disappear completely and be replaced by some form of government controlled economic system in the not too distant future. As it turned out, that is now being realized in the form of fascism (corporate capitalism). The end result will be economic windfall for the privileged few and economic disaster for the broad majority in this country.

[n2mark]

4. That $108 figure says nothing

Is that $108, a year until their death or total savings? If it is $108,00 a year, someone is drinking the kool-aid and very strong kool -aid. I don't know any seniors who accrue that amount during a year.

[taquinas101]

5. Net Worth Is Not Income - Americans Over 65 Have A Median $108K Net Worth

Your posts makes a very common mistake, which is confusing net worth with income. The $108K figure referred to net worth, which refers to assets over liabilities a point in time. In other words, it represeants a snap shot, which states that the many Americans over 65 have only accrued $108K in net assets INCLUDING their home equity.

In addition, this $108K figure refers to households, it is not a per capita figure. Thus, many senior couples have to fund their retirements with this amount or less considering that most of the amount is tied up in their home equity.

Now, I agree I would love to receive $108K in income per a year, but income is different from net worth. Its a common mistake that many people make. Income refers to cash flow over a certain period of time. The income that a median household would recieve is probably based no the interest generated by the household's savings. so, lets say you have $23K net worth aside from home equity, try living off the interest generated by $23K.

Bottom line, most American seniors will be dramatically harmed by a program designed to switch social security to a system of private savings accounts. As the census report shows, most households have not accumulated nearly enough assets to fund their retirements. Creating a nationalized 401(k) is not the answer.

[SoCalDem]

6. Equity..which evaporates with one longterm illness

I always advise people in their 50's and up to "sell" their homes to their grown children and then "rent" it from them.. The "kids" are probably at a stage in their lives where they could use the extra deductions, and it at least preserves a home for the elderly parents to live in.. This must be done with a certain numbers of years prior to an "event" that would/could precipitate having to "sign the home over" to a nursing home or care facility.. This is how many widows and widowers lose their homes.. One of them gets too sick to be cared for bu the other, and they must "impoverish' themselves in order to qualify for any additional aid.. so a property that it took them a lifetime to pay for is squandered for an "last illness" of one of the couples.. Is it any wonder why the "surviving spouse" often follows soon:(


This plan only works if you have kids you can trust, and of course an only child situation is probably the easiest too..

They would theoretically have to "buy" it at fair market value, but the "rent" could be structured so that the "mortgage payment" could be met and prepaid, and still leave Mom & Dad with enough to live on..:)

Lawyers would certainly be a part of the plan :)