Members of Gen X have a lot to talk about. According to a recent Pew Research Center analysis, their median wealth was 56 percent lower in 2010 than that of adults the same age in 2001. They are more likely to be waitress moms than soccer moms, to have bought homes at inflated prices during the housing boom, and to have lost wealth during the bust. They started work just as companies began downgrading health plans and phasing out pensions by shifting from expensive defined-contribution plans to 401(k)s and other prodicts, if they offered anything.
A separate study, conducted by Wells Fargo, shows that 30 percent of Americans now plan to work until they are 80 or older. That is up from 25 percent a year ago. About 70 percent plan to work some sort of job after they retire from their current positions. Can you imagine great-grandpa pumping gas?
Respondents told the Wells Fargo survey takers that they are too swamped keeping up with current bills to save for retirement. With all this anxiety, Congress should be listening carefully.
The lawmakers will be taking up Social Security as they address the debt crisis. In doing so, they must keep in mind that while Social Security was once a supplemental retirement fund for many workers who also had company pensions, it is now a prime source of income.
The Social Security trust fund has enough money to pay full benefits through 2036, but 2023 is projected to be the first year that benefits will exceed revenue from payroll taxes and interest. The fund is healthy for now, but the sooner the structural gap is addressed, the less painful it will be to fix. On the table are a variety of solutions, including eliminating the maximum taxable earnings cap for Social Security contributions. Workers aren't paying the tax on gross pay after $110,100. But many with salaries that high can afford to continue paying the tax.
Other options include combinations of raising the retirement age, hiking the Social Security tax, and cutting benefits for future retirees. It would be unconscionable to cut benefits considering how Gen X is already struggling more in today's economy. Recent college graduates face $1 trillion in student debt with poor employment prospects, and anyone who did not attend college faces an even bleaker financial future.
As these younger adults tread choppy financial waters, they must speak up loudly in confronting political leaders about their concerns. Persuading government to solidify Social Security and businesses to offer stronger private retirement packages would be a great legacy to leave their own grandkids.