"Why is this so critical? It is bad now, and only going to get worse. CNBC estimates that between 10,000 and 11,000 baby boomers retire each day. Many of them will have only Social Security to live on."
What? What do you mean "poor"? This economy has taken off like a rocket ship! Jobs, jobs and more jobs! How can someone be "poor"? Actually it is not hard at all. Some of the new poor are young, and some not so young. In fact, if you are a senior citizen, retired, and unprepared, you could end up as one of the new poor.
Currently, anywhere between 20 and 40% of all retirees in America get 90% of their income from Social Security. In 2017, the average Social Security check was $1,360. Try living on that amount for a month.
My wife and I have been blessed with some pensions to go along with our Social Security. Many folks are not. Why? The number of companies offering defined pension plans started to whittle down to about zero in the 1980's. They became rare in the 1990's and almost non-existent in the 2010's. The remaining option for retirement was to "self fund" your pension using an IRA, 401k or 403b. If the market was going well, those plans went well. However, in the dot com bust, the 9/11 terror attack, or the 2008 Great Recession, most retirement plans took a bit hit.
In the paper this morning, there was an article about the poor in Minneapolis. Not surprising, a growing number of seniors living only on Social Security have joined the ranks of the homeless. Why? If Social Security is all they have, $1,360/mo does not pay for rent, food, utilities, insurance and so on.
Some folks get to their golden years in precarious financial shape due to poor planning. Others, due to circumstances beyond their control. Some had health issues midway through their working career. Some were "rightsized" and then "downsized" in their early 50's while working for a company or organization, and never found another well paying job. The reasons are endless why someone could get to 65 with less than $10,000 in savings and only Social Security for income.
What do I think we should do with our elderly poor? First off, eliminate ALL federal and state taxation on Social Security. Period. It is immoral to tax income twice. Plus the COLA raises which seniors have finally started receiving, are parsimonious at best. Next, decent and safe housing should be made available to seniors which meet their income levels. In other words, rent for a person making $1,360 a month should take not more than 50% of that amount.
The article in the paper also talked about the emergency shelters which exist in the city today. Guess what? All are usually filled to capacity. Then what? Out on the streets? Live in your car (if you even have one)? No, this issue needs to be addressed, and quickly.
Why is this so critical? It is bad now, and only going to get worse. CNBC estimates that between 10,000 and 11,000 baby boomers retire each day. Many of them will have only Social Security to live on. As my wife and I learned while working with the homeless,1) nobody ever plans on being homeless and 2) many are only one bad break away from losing their shelter.
More on this issue in a later post. In the meantime, should you be so inclined, consider partnering up a well vetted charity which helps the poor and homeless in your community. We have been a partner with Union Gospel Mission (UGM) in St.Paul for years now, and are amazed at the work they do. But there are others, just as compassionate and well run as UGM.
Once again, often times there is a very fine line between contributing to a charity, or using services that charity. Sometimes it does not take much for that line to be erased.