Assessing Social Security’s Role in the “Transition” to Retirement - ASPPA/ICI
In an article challenging the belief that there is a widespread “retirement crisis” in play in America, contributor John Sullivan of the American Society of Pension Professionals and Actuaries (ASPPA) offers a different view of how Social Security factors into retirement financing for seniors. His article, which summarizes research published by the Investment Company Institute (ICI), addresses the issue of “how … the amount and compositions of spendable income for individuals change(s) from middle to old age.” As Sullivan suggests, the popular notion of a widespread retirement crisis might be overstated in media accounts, since data on which the ICI study is based note that “Most people tend to maintain a high percentage of their spendable income in retirement, and they rely on a variety of resources to do so.”
While the ICI study does comport with noted experts’ opinions on retirement savings adequacy, Sullivan’s analysis does acknowledge the plight of a population segment that replaces “a very high percentage of their retirement income” with Social Security.” As he suggests, that’s an aspect that can be researched but, on an overall sense, he concludes that the ICI study does not support the existence of “a widespread retirement crisis.” Despite the upside picture on retirement savings, a USAToday report last year noted that “A million more seniors age 65 years and older fell into poverty last year, boosting the percentage in poverty to 10.3%, from 8.9% in 2020 and the highest level since 2002, according to the latest Census Bureau data.” The USAToday article goes on to explore the continued ravages of inflation and the need for attention to ways to shore up the financial picture for a growing population segment.
Read John Sullivan’s ASPPA article here and, for more insight into the ICI study, click here.