476 Today's Nest Egg Hasn't Changed Much

Yesterday’s Wall Street Journal had an article about Social Security in which it claims that people didn’t have retirement nest eggs before the 1930s--this apparently written by a young person who believes owning stock is the only way to a sound retirement--therefore Social Security was born. The pre-1930 plan was to own assets and to have adult children to help. Not everyone did, of course, just as today not everyone buys stock or has 401(k)s or IRAs.

Social Security was never intended to be a retirement fund which could support any standard of living above rock bottom. It has been an extremely badly managed government program and will never be as good as privately managed funds because the government has never invested it for growth, but used it for other programs. It is a safety net period, and should be reserved for those who were unable to work to contribute to their own accounts. Today’s workers are paying for my husband’s check--he is not receiving the payout of his efforts.

My husband contributed the maximum every year he worked, and his monthly Social Security is about $1,500. My STRS pension is about the same, and I’m not eligible for the wife’s portion of Social Security. Although it might be possible to live on this, we’d certainly have to slim down somewhere--our auto and house insurance bill came this week and it is over $2,000. Our long-term care insurance is over $3,000 a year. Our annual health insurance I haven’t exactly figured out yet, but even with Medicare, it will be around $5,700 for the two of us. So just our insurance takes close to one-third of our retirement income, and we haven’t even gotten to taxes yet.

Our real estate taxes are over $5,000. Our local income taxes are about $300 a quarter and our federal taxes about $1500 a quarter, plus the $360 annually taken from my pension which I think totals about $7,560. Add to the taxes and insurance, our church tithe of 10% of our gross income, and I think we’re left with less than $100 a month for both of us from our combined pension/social security.

So please, Mr. Young Guy at the Wall Street Journal, don’t tell me retired people today are a lot better off than the 1930s because of Social Security! Fortunately, we do have adult children, and have invested in real estate, just the way our grandparents did.