Many Americans are facing a retirement crisis including 35% of working Republicans over the age of 50 who are likely to face an income shortfall in retirement.
A poll commissioned by the Transamerica Center for Retirement Studies and conducted by Harris Poll found that 30% percent of Baby Boomers (age 55-73) have less than $100,000 in retirement savings and 45% percent of Generation X (age 41-54) have less than $100,000 in retirement savings. These findings match the polling commissioned by Americas Majority Foundation for this study on the Politics of Retirement.
To understand the retirement crisis, it helps to look at how it plays out at the individual level.
A 55-year-old currently making $50,000 year could expect to receive $1,090 a month if they started taking Social Security at age 62 or $1,600 a month if they waited to age 67. If this person has $100,000 saved by age 67 and expects to live to 80, they can reasonably plan to draw $8773 in monthly income from their retirement savings for an annual income of about $30,000 (before taxes) if they can wait till age 67 to draw Social Security.
If this same person has to retire at due to a health problem at 62 and has $85,000 saved, their monthly income from Social Security and savings drops to $1,678 a month or $20,000 a year.
For a person who had been making $50,000 a year, going to $20,000 a year is a crisis.
These illustrations could easily apply to 35% of Republicans over the age of 50. The impact of the retirement crisis could dramatically realign the electorate as a significant share of those who would be impacted the hardest are members of the current Trump/Conservative coalition.
The Democrats have already proposed their own plans. Social Security 2100 act which includes phrasing out the $132,000 cap on Social Security taxes to fund increased payments to retirees. The Democrats have also proposed allowing workers over the age of 50 to “buy in” to Medicare for their health insurance.
The current state of retirement savings has been studied by academics and industry groups. The causes of the retirement crisis are numerous and interconnected and related to the basic human tendency to spend rather than save.
While there is rich data on the trends of retirement preparation most polls about retirement savings and preparation do not ask questions about partisan political identification and ideological world view. This project was designed to illuminate how a retirement crisis could manifest and affect elections and used three separate polling firms—Cygnal, Evolving Strategies, VCreek/AMG—nationally surveying more than 2,800 respondents age 50+ with a mix of Cell Phone, Land Line, and Online methodologies.
This study is the first part of two studies in which we review preparation for retirement and the politics of retirement beginning with voters 50 and over. The second part of the study will deal with voters 18 to 49.