In a recent op-ed, Teresa Ghilarducci criticized Andrew Biggs for denying the existence of a retirement crisis in America. The debate stemmed from an article published in The Hill where Biggs criticized Bernie Sanders’ claims about the retirement crisis. Sanders had claimed that nearly half of Americans aged 55 and older have no retirement savings, but this fact is not accurate. Sanders’ claims were based on a Government Accountability Office study that only counted balances in 401(k) or IRA accounts as retirement savings, excluding traditional defined benefit pensions.
The GAO report revealed that only 29% of Americans aged 55+ have no retirement savings when pensions are included as well. Additionally, the Federal Reserve’s Survey of Household Economics and Decision making showed that 88% of households aged 60 and over had some form of retirement savings in 2022. These facts debunk Sanders’ claim and highlight the need for a more accurate discussion around the U.S. retirement system.
Biggs argues that retirement savings have increased significantly over the years, with higher access to retirement plans, increased plan contributions, and record labor force participation among older adults. Social Security benefits have also risen, leading to record high retirement incomes and a decline in elderly poverty. Data from various sources suggest that future retirees will have similar retirement incomes compared to past and present seniors, indicating a stable retirement outlook for many Americans.
Despite these positive trends, there are still differing opinions on the state of Americans’ retirement preparedness. While Biggs is optimistic about the system, others believe there is a crisis that needs to be addressed. However, it is crucial for the debate to be grounded in accurate data and facts in order to identify areas for improvement in the U.S. retirement system. The first step towards resolving the debate is to stop spreading misinformation and focus on evidence-based arguments.
In the next part of the discussion, Biggs plans to address how beliefs in the retirement crisis are derived from flawed data and why it is important for policymakers and experts to have a clear understanding of the facts. By promoting a more informed and fact-based discussion on retirement issues, stakeholders can work towards improving the retirement system and ensuring financial security for all Americans in their later years.
