Her number one financial worry isn’t far-off retirement; it’s finding the down payment to buy a house with her partner. He has no credit history, and hers is hardly stellar. Tayabji said she used a lot of credit to live on and had medical debts. Paying off her creditors is also a primary concern, and any spare cash goes toward that goal. That means she doesn’t have enough to save in a pension plan like an IRA or a 401(k). Tayabji said that she did start a Roth IRA but was forced to close it because she didn’t have the money to maintain it. The minimum monthly contribution was $50, but she said that was “pushing it.” The $50 was going toward credit payments, so she closed out the $75 she had been able to save over eight or nine months. She won’t set up another IRA until her debts are cleared.
There’s no pension or 401(k) plan where she currently works, but she knows that some of the larger non-profits in the area do have pension plans which she could contribute to later on if she ends up working for one of them. So unless her employment prospects bring a much higher salary and a pension, her only retirement income will be Social Security, with whatever the average benefit is when she retires. If the retirement age for her age cohort is pushed to seventy, that translates into a benefit reduction for her.
We talked about what Social Security is and is not, and while Tayabji said she didn’t know a lot about it, she said that “it’s definitely important to have,” adding that “in general we don’t know where the money we put in goes and what it means down the road.” When I asked her if it was a welfare program, she said “yes and no.” I probed further. “Yes, in the sense that it’s there to help us out to provide assistance. No, in the sense that we pay into it. People think that welfare is claiming something they haven’t earned.”
I asked her about how she would feel if the retirement age were raised for collecting full Social Security benefits, an option that’s gaining traction among Washington’s economic cognoscenti. Tayabji said it was hard to concretely understand how she would be affected because “I’m wondering what my next job will be.” But then she said “it would definitely be upsetting because there has been no reason explained that justifies raising the age. There has not been much in the media. That blanket statement people are living longer isn’t applicable to many groups,” she explained.
“In regards to the deficit,” she said, “we need to do something to reduce it, but raising the age of retirement is not the way to do that. It definitely favors the upper classes, not working or lower income people.”
Taybaji apologized for not knowing more about the system. “I feel like I need to know more,” she said. What would help? “Having a really informative site that has information that was really objective,” she told me.
Who would you trust to provide it? I asked. “Certain media sources—more progressive ones and more investigative journalism,” she replied
I questioned her about conservative sites. “I would want to see multiple sources from different angles and perspectives,” she answered. What about the government? “I’m sure the government has something, but it wouldn’t be an objective source,” she said. “To me there’s not a lot of transparency in the government.”