Monday, 4 February 2019

USA pensioners are offered to work to death

Elderly people in the United States face the same poverty as in the Great Depression. Money for state pensions is running out, and Americans can no longer save up for their old age. What happened to the once ideal system, the example of which was repeatedly advised Russia?

More recently, the US pension system was considered one of the best in the world. A tanned and cheerful old man, who divides his time between the beaches of Florida and cruises in the Caribbean - this is how the American retiree presented himself to the world. But as time went on, a large generation of baby boomers grew old - and the seemingly debugged system failed.

The American pension has three sources, three components. This is, firstly, social security payments - $ 600–800 a month, which the employee can receive if his employer has paid insurance premiums for at least 10 years. The second part is the savings made by the employee together with the employer. Usually, they are called the “401 (k)” plan (meaning that during the period of work you need to save yourself for old age, and you can withdraw this money from the account after 59 years). Finally, these are individual savings of citizens — investments in stocks, in real estate, or cash under a pillow.

When an extremely large post-war generation began to retire, it turned out that the social security system simply did not have enough money. Last year alone, the deficit was about a trillion dollars. Optimists believe that social pensions will be radically reduced by 2034. Pessimists insist that the system will go bankrupt in eight years. The same fate awaits the Medicare health insurance system.

With the plan "401 (k)" there was also an overlay. In the 1970s, commercial companies offered their state a “defined benefit” retirement plan, that is, employers contributed money for employees, which helped them ease the tax burden. But in the early 1980s, they realized that a plan with “fixed contributions”, which the employee himself had to do, was much more profitable for them.

If in 1980, 38% of working Americans used a retirement plan with fixed benefits, then by 2008 there were only 13% of such lucky ones. According to the plans with fixed contributions, the statistics is just the opposite, but many simply could not manage it. Analysts prescribe at least seven annual salaries by the age of 60, but for most Americans, this is an impossible task. Today, the median savings of 40–45-year-olds on this plan are only 14.5 thousand dollars - this money will not be enough for a future retiree even for a year.

Many pension plans collapsed during the 2008–2010 recession. Firms went bankrupt, employees ended up on the street, and at the same time their retirement savings made by their employers disappeared. In the second half of 2008 alone, the 401 (k) system lost $ 2.4 trillion.

As for individual savings, the workers here also faced problems. Investments in stocks were often risky — at least the cost of the dot-com crash in 2000 was worth it. After the collapse of the shares of Internet companies, future retirees hurried to invest in real estate. The cost of houses soared sharply, another “bubble” formed on the market, and ultimately all this led to the Great Recession. Houses began to sell while suffering serious losses.

To date, well-fed old age does not shine and half of the American households. It is caused by the stagnation of the growth of wages, which are barely enough for life, and the departure of employers from all responsibility for their employees. Precariat earns freelancing, and these new lumps cannot even dream of a social package. As a result, 35% of adult Americans have savings of less than a thousand dollars, while 34% have no savings at all.

A separate danger was the sharply increased cost of medical services and drugs. Once in the hospital, elderly Americans are often forced to give the clinic all that they managed to save up for life. They can only hope for the help of children, but the Millennials have their own difficulties with work, sometimes they simply have nothing to do with the old ones.

Stand apart among retirees are state employees - police, teachers, firefighters, judges. Having accumulated experience, these civil servants can count on a really good state pension - from $ 2,000 per month. However, 22 million state employees make up only 14% of the working population of the United States. Most citizens work for private companies and at the age of 65–67 years (the time of retirement in the United States does not depend on gender but on the year of birth) are close to total bankruptcy.

The stories of older Americans trying to survive the crisis of the pension system have become a popular topic for reporting. So, 76-year-old Roberta Gordon from California told The Atlantic magazine that she worked almost her whole life, having tried various professions - she was a cleaner, nurse, distributor, librarian. Often her employers did not make payments to the social security system, and now she receives only 915 dollars a month. Outside the United States, this is a very good amount, but the high cost of California life makes Robert almost impoverished. Just renting an apartment costs her $ 1040 a month.

If Roberta gets sick, she will have to pay more than eight thousand for treatment from her own savings before her insurance begins to work. Therefore, she “tries not to get sick”, and on Saturdays she earns money at the local grocery store, getting $ 50 a day. In addition, in the grocery bank at the local church, she is given free food.

67-year-old Deborah Bello, who has been a waitress for 30 years, receives from Social Security even less - $ 778. She still has to work full time, but she doesn’t have enough money to even buy a TV.
America’s pension crisis has hit women especially hard. Small, not always white salaries and years spent on raising children led to the fact that in their old age they have to literally survive. Children would be happy to help, but they themselves do not have enough money.

Retirees see a way out to work after retirement. If in 2000 in the USA there were only 3% of working pensioners, now there are already 12.4%. However, this does not save from a sharp decline in the standard of living - only low paid and unstable job offers are offered to old men.

Experts predict that if the current trend continues, a third of retirees from the baby boomer generation will soon be below the poverty line. This will repeat the situation since the Great Depression.

Not all older people can even keep a roof over their heads. If in 1990 only 11% of the American homeless were over 50, by 2016 their share had increased to 50%.

The aging population is not only impoverished itself, but also pulls subsequent generations to the bottom of the economy. Instead of investing in their children, Americans are forced to spend all free money on their ancestors. This threatens not only the economy of the country, but also the entire American way of life. Work until you die - this is what the modern version of the United States pension system looks like for most.

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