Staying Fit
Background
Lifetime retirement security is a top concern for AARP members. Recent deep losses in market value have raised fundamental questions about the security of individual retirement savings. At the same time, the crisis on Wall Street dramatically underscores how devastating it would have been to have private accounts in Social Security, and how critical it is to strengthen Social Security so that it can continue to provide a retirement income foundation for everyone, as it has done successfully for the past 75 years.
AARP Membership— $12 for your first year when you sign up for Automatic Renewal
Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine.
Unfortunately, Social Security is not designed to be the sole source of income in retirement. Planners say that retirees need a minimum of about 70 percent of the income they had when they were working in order to maintain their standard of living. The average worker will receive about 41 percent of that from Social Security (falling to 36 percent due to scheduled retirement-age increases). For the remaining retirement income needs, individuals have to rely on employer-sponsored pensions or personal savings—and millions will fall short.
Over the past year, workers at or near retirement age have lost a large portion of their anticipated income. While it is difficult to accurately assess the decline, estimates suggest that losses in private retirement accounts over the past year may have reached $2.3 trillion, or 27 percent. Employer-sponsored pensions have also suffered great losses.
Older individuals have disproportionately suffered these losses. At the end of September 2008, households age 50 and older held 71.5 percent of all retirement account assets. Many retirees and those near retirement will not have time to wait for the market to recover and will have no choice but to reduce their standards of living.
More on politics-society
Get Yourself Ready for the 2020 Election
Expect rough-and-tumble campaigns in which issues take a back seat and social media dominates