While many in Washington and on Wall Street are talking about cutting Social Security, the real problem is that America's patchwork retirement system is already eroding. Once, the majority of America's seniors could look forward to at least a modestly middle-class retirement. That dream is fading.
America's retirement system is said to be a three-legged stool made up of private savings, pension plans, and Social Security. But each leg of the stool is wobbly, while a fourth unacknowledged leg -- asset accumulation from home equity -- has also taken a huge hit. Absent drastic changes in retirement policy, more elderly Americans will be poor, and many more will be working, often in low-wage jobs, because they can't afford to retire.
A popular myth is that because we live longer, we should work longer. But while Americans indeed enjoy longer life spans, a great many are not happy to be in the paid workforce. They are working not for the social or intellectual stimulation but out of plain economic need. They are working because America's pension system is collapsing -- and the more it collapses, the more older Americans will have to work.