By Lisa Slotznick
BACK TO THE 2024 ELECTION AND VOTING—older citizens are more likely to vote and participate in elections than other age groups in the U.S. Of the Academy’s election-year mega-issues, Social Security in particular (but retirement income more generally) are big issues for this voting demographic.
Americans look forward to their golden years and retirement with a mixture of feelings—disbelief that we can ever be that old, anxiety over planning for a financially secure “old age” … and for some Americans, fear that they don’t know how to save for that time. An additional wrinkle is the uncertainty of our health as we age: Will we be blessed to have a healthy old age, or will we be visiting doctors all along with the attendant costs of health care and additional assistance?
As in any good Academy document, I do need to disclose my potential conflicts of interest—I am a retiree and I have my Medicare card. So, all of this is real to me … not just as an actuary, but also as an American citizen.
As we think about the three pillars of retirement income— savings, pensions, and Social Security—the one most likely to be the stuff of election discussion is Social Security. The Academy’s Social Security Challenge has helped me and the Academy’s public stakeholders—including members of Congress and their staffs—to have a clear view into the pushes and pulls on multiple ways to reach a fully funded status: approaches that add to funding, the hard choices of reducing costs through decreasing benefits, and even (on the other side) increasing benefits for those in the most need. The Challenge allows each of us to choose our own way of bringing balance to the system. Try it! When I take the Challenge, I gain comfort that the Academy has added information to the discussion related to understanding the choices before us—without advocating for a particular approach.
While a discussion on the other pillars of retirement income—savings and pensions—will not get the airtime that Social Security will, our Retirement Practice Council continues to provide input into assuring that public and private pension plan funding is analyzed appropriately and that the backstop for pension plans, the Pension Benefits Guaranty Corporation, is given due consideration. And the Academy’s workstream bears that out: Recent issue briefs deal with assumptions related to mortality, investment returns, and overall plan design.
Will our combined retirement income last us throughout our retirement? Visit the Actuaries Longevity Illustrator to get an idea of how long each one of us individually can expect to live into our retirement—and thus need our savings to last.
I need to mention Medicare while I am on the topic of retirement security. Just like Social Security, Medicare is facing financing challenges that will require congressional action. Of course, those of us who are planners (most actuaries) are eager for a sooner-rather-than-later tackling of the funding issues of both Social Security and Medicare. Watching the 2023 webinar on Medicare funding levels did make me nervous as future health care spend is an inevitable part of our aging America.
As we all look to our potential retirement spend, health care and life care (either at home or in a facility) are significant components. Last issue’s Contingencies feature on long-term care insurance reminded us that there is insurance for life care that retirees with the coverage are not allowing to lapse, but is a considerable need for many without the coverage.
For many retirees (and Americans in general), a high proportion of their net worth is embedded in homeownership. As climate change impacts the cost of property insurance due to increases in claims due to wildfires, storms of all types and floods, retirees who no longer have a mortgage may go bare on property insurance or want to move and not be able to afford it. This additional stress on the expenses that retirement income needs to cover may not make it to the headlines, but are…
Oh no! Climate was the topic for my last article. Let me focus back on Social Security, Medicare, and other sources of retirement income. As a society, we need to grapple with how we will continue to finance these programs for all of us—with input from the Academy as an aid to our policymakers in the process.
And may we all be healthy as we age!
