October 27, 2015
Hey, who can blame them? It’s an obscure government program with 60 million beneficiaries, with benefits that are so small that they don’t matter to anyone who is anyone.
I’m actually not joking here. The WSJ ran an article telling readers that the average baby boomer between the ages of 55-64 faces a gap of $36,371 between the $45,000 a year they expect to need as income in retirement and the $9,129 they can expect to get based on the savings they have accumulated. The incredible part of the story is that the piece never once mentions Social Security, nor does the Blackrock study on which the article is based.
While Social Security benefits will not fill this gap, they will be by far the largest part of the retirement income of most middle income retirees. The average worker’s retirement benefit is roughly $16,000 a year. If this is a couple, then the spouse can count a benefit of at least $8,000 unless his work history entitled him to a larger benefit. Together with the savings accumulations estimated by Blackrock, this is still likely to leave most middle income couples well below the $45,000 comfort level that the study found, but they are far closer than the discussion in the WSJ article implied.
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