One of the great success stories of the 20th century was the decline in poverty among the elderly. That story, however, is starting to change.
A typical American worker in the middle rung of the earnings ladder — whose career pay averaged out at about $46,000 a year in today’s money — could retire this year at age 65 with a Social Security benefit worth 39 percent of the career average.
But unless something is done to replenish Social Security’s shrinking trust funds, by 2035 the first pension check for such a worker might amount to as little as 27.5 percent of her career wage, according to calculations published last year by the chief actuary of the Social Security Administration.
This is not merely an American trend. A preliminary analysis by economists at the Organization for Economic Cooperation and Development, the official research and policy arm of the world’s advanced industrial nations, suggests that the gross replacement rates of public pension systems in a number of European countries are likely to decline over the next half century or so.
– The New York Times