What would Social Security coverage look like if the press covered it more like personal finance reporters cover IRAs and 401(k)s?
The Wall Street Journal’s Ellen Schultz shows us with a great piece on Social Security that cuts through the propaganda that’s falsely convinced so many people that they won’t ever draw benefits:
Despite widespread gloom over the health of the system, it will be still be able to pay at least 70% of benefits in coming decades, even if no action is taken.
That means you need to take the benefits into account when estimating your retirement income, how much you’ll need to save and how to allocate your investments to achieve your goals.
A 50-year-old man, for example, might have accrued a Social Security benefit worth $1,750 a month at full retirement age. Assuming annual cost-of-living adjustments of 2% a year and a life expectancy of 90, the present value of his Social Security benefits would be $588,551 if he starts taking them at age 62, and $802,039 if he begins at 70, says William Meyer, founder of Social Security Solutions, a Leawood, Kan., financial-planning firm.
To generate the same amount of income they would be receiving from Social Security taken at age 70, the individual would have to pay $436,517 today into an immediate annuity, says Mr. Meyer.
If those look like high numbers, it’s because they are.
The median 401(k) for people 55 to 64 is less than $60,000.
And that’s among people who have private retirement accounts. Most people nearing retirement don’t, which means the median retirement-account savings is zero.
Even among the best-earning quarter of 55 to 64 year olds, the median retirement account balance is just $52,000.
More like this, please.
— Columbia’s Bill Grueskin at 10:55 last night on Twitter:
It’s almost time for @cnbc to blast out its online reader poll that has no significance whatsoever— BGrueskin (@BGrueskin) October 23, 2012
And 51 minutes later:
For the back story, read my post from two weeks ago on how CNBC’s misleading tweet spread through the media.
The Financial Times appears to be the only major outlet to fall for CNBC’s bogus poll this time.
— Gawker’s Hamilton Nolan has the best take yet on the Goldman Sachs/savvy biz journalist pushback against Greg Smith, writing “In Defense of Being Outraged by Things that Everyone Already Knows”:
So before that backlash is fully formed, allow us to offer a defense of Greg Smith, and others like him, who assert their moral outrage over bad situations that are ostensibly “well known” even before they raise their voices in protest.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at email@example.com. Follow him on Twitter at @ryanchittum. Tags: CNBC, Goldman Sachs, Greg Smith, social security, The Wall Street Journal
The backlash, of course, is already well under way. The NYT’s Andrew Ross Sorkin said he thought Smith “might have conned” the media into paying attention to him, because his book “doesn’t say anything particularly revelatory.” Nathan Vardi at Forbes dismisses Smith’s complaints, saying that clients distrusting their own banks is “precisely what should be happening in financial markets.” The NY Daily News complains that Smith’s book “failed to make his readers care” about the issues he raises. As Bloomberg View put it in its original snide dismissal of Smith’s op-ed, “If you want to dedicate your life to serving humanity, do not go to work for Goldman Sachs.”
What bothers most Wall Street-savvy critics about Greg Smith is this: he got a lot of attention for complaining about a situation that all of these Wall Street-savvy people already know exists.