The Documentary, Broken Eggs: The Looming Retirement Crisis In America, looks at the financial struggles Americans find in retirement. The movie reveals the shocking reality of the Social Security system and how the problem could potentially become worse before it gets better.
The documentary combines animation with reality. Comparing the financial struggles of their everyday lives to a “Humpty Dumpty” egg. The egg’s shell is cracking under the pressures placed over the country’s retirement system.
A focus on why Americans are failing to effectively save for retirement and highlights some of the most common struggles. Reasons include unexpected healthcare costs at a young age, unsustainable/rising health care costs, life expectancy increases, sluggish economic activity and the disappearance of the 3-leg stool retirement model.
The working American profiles included in the documentary are:
- A 40-something single, working mom with low income and a pension in jeopardy
- A 65-year old couple who dealt with unemployment and an unexpected cancer diagnosis
- A college student / activist trying to change the system
- A 70-year old grandmother who continues to work a part-time job. Social Security doesn’t pay her enough to make ends meet
- A mid-50’s man who states that Social Security is 98% his retirement plan. The remaining 2% is his 401(k) that doesn’t have enough money in it.
- A couple in their late 30’s/ early 40’s with a child born with a congenital heart defect. Additional surgeries and treatments will be required for the rest of her life
- An adult child in debt who moves in with his elderly parents until he settles into a new job
- A public service worker worried about the state of his pension
Watch – Broken Eggs: The Looming Retirement Crisis in America
The statistics and facts don’t lie. If Social Security keeps the same pace as today, it will be insolvent within the next 20 years. “Social Security is not only bankrupt, it’s bankrupting future generations”. That ominous quote is from Laurence Kotlikoff, author of The Clash of Generations and a professor of economics at Boston University.
This is a scary realization. 10,000 Baby Boomers will retire every day until the year 2034.
In fact, the Social Security Administration has actually added this “disclaimer” to all Social Security statements:
Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change because, by 2034, the payroll taxes collected will be enough to pay only about 77 percent of scheduled benefits.
The 3-Leg Stool Retirement Model
Social Security assumed a lower life expectancy when written into law back in the 1930s. Also, retirement income included multiple streams of income (and not relying on Social Security as 100% of their income).
The 3-leg stool retirement savings model requires that Americans obtain income during retirement from: pensions, personal savings and Social Security. However, a majority of retirees are overly reliant on Social Security. This reliance is due to changes in the ways they are able to obtain income. Limited pension availability and the inability for people to personally save up enough money affect savings and cash flow. The rising healthcare costs and overall costs of living affect expenses.
Facts and Figures
Here is a breakdown of the facts and figures presented in the Broken Eggs documentary:
- In 1950, there were 16.5 workers for every Social Security beneficiary. Today, less than 3 workers paying in for each recipient.
- Less than one out of every five private sector employees has a pension.
- Americans who make it to age 65 today can expect to live roughly 18 years more. Six years longer than expectations for 65 year old adults in 1940.
- According to the Employee Benefit Research Institute:
- Nearly half of American workers have less than $10,000 in savings
- 1 in 3 workers have not saved for retirement at all
- 7 out of 10 American workers plan to “work for pay” after retirement age
- According to The Center for Retirement Research, Boston College:
- American workers lack $6.6 trillion dollars from what they need to be saving for retirement.
- According to the PEW Research Center:
- In 2010, US States were $1.38 Trillion dollars short of retirement obligations for public-sector employees.
Proposed Social Security Fixes
The documentary discusses a few hotly debated options to fix the Social Security system and prevent insolvency.
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- The first option would be to increase payroll taxes by 2.66% (split equally between employee and employer). This would support the program for another 75 years.
- The second option is what the documentary dubbed “The Forever Fix”. An increase in payroll taxes by 4% (2% paid by employee and 2% paid by employer).
It will be up to the current and future generations to fix the problems with the Social Security.
If you don’t want to wait for the government to solve the problem: you do have the option to take matters into your own hands and buy insurance on your Social Security benefits via The PlanGap Annuity.
What age should you start saving for retirement? Read our article to find out.
Kate writes about retirement benefits for retirementinsurance.org. She has a Masters Degree in Social Work (MSW). She has over a decade of experience in assisting elderly and disabled populations navigate governmental and private programs to obtain the monetary assistance they need to lead better lives. As she watched her parents begin their own retirement journeys and navigate similar systems to obtain Social Security, Medicare and other retirement benefits, she gleaned a further personal knowledge about the topic and is eager to share what she has learned with others.