The Changing Nature of the Life Course __________________________________ Source: Matilda White Riley (1988) Types of Social Structure

Financial Security in Old Age ________________________ What comes to your mind when you think about this topic? Your Savings Account? Charts about U.S. savings rates? Social Security?

Financial Security in Retirement _______________________

Financial Security in Old Age ________________________

Social Policies Older Americans to address the needs of

The U.S. Welfare State _______________________ American Welfare Politics: Three (or 4-) legged Stool of Retirement Income Social Security Reform Pension Terminology Q & A

The U.S. Welfare State _______________________ Source: Edward Berkowitz, America’s Welfare State from Roosevelt to Reagan. Baltimore, MD: Johns Hopkins Press, 1991.

Prior to the U.S. Welfare State ________________________

The Setting: The Great Depression _______________________

The Development of the U.S. Welfare State ________________________ President Franklin D. Roosevelt 1935

The Development of the U.S. Welfare State ________________________ President Franklin D. Roosevelt signing the Social Security Act on August 14, 1935 We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, But we have tried to frame a law which gives some measure of protections to the average citizen and his family against the loss of a job and against poverty-ridden old age.

U.S. Social Welfare Programs ________________________ Social Insurance (Social Security) Social Assistance (Supplementary Security Income, SSI) Two-tiered System

Social InsuranceSocial Assistance Social Security Medicare (pays doctors and hospitals) Administered by the Federal Government Entitlement Programs Age-based not need- based SSI Medicaid (for nursing home care and medical insurance for the poor and blind) Administered by the States Varying eligibility and benefit rules Need-based programs

U.S. Retirement Policy _____________________ Three-legged stool of Retirement Income – Social Security – Assets – Pensions – Earnings (For some the three-legged stool wobbles -so a fourth leg is added)

Pensions, IRAs, etc. ______________________ Public Pensions – General Public Pension (Social Security) – Public Employee Pensions (federal, state and local government employees) Job-specific Pensions Private Pensions Job-related or Union-sponsored Pensions (teamsters, teachers, etc.) Personal Retirement Plans (IRAs, Keoghs)IRAsKeoghs

Funding of Pension Systems _________________________ Pay-as-you-go Partially pre-funded Pre-funded

Pension Terminology ______________________ ERISA and PBGC VESTING PORTABILITY COLA

Major Changes in the US Pension System ______________________ Defined Benefit Plans to Defined Contribution Plans

Major Changes in the US Pension System ______________________

Social Security System _____________________ What kind of pension system is the social security system? Defined Benefit or Defined Contribution? Pay-as-you-go or Pre-funded?

Achievements of Social Security

Impact of Social Security Impact of Social Security ______________________

Who gets Social Security? Who gets Social Security? ______________________

Who needs Social Security? Who needs Social Security? ______________________

Without Social Security? Poverty% Without Social Security? Poverty% ______________________

The Federal Budget: Income The Federal Budget: Income ______________________

Federal Budget Revenue Percent

Budget Surplus

Social Security & the Surplus Social Security & the Surplus ______________________

What’s the problem with Social Security? What’s the problem with Social Security? __________________________

Social Security Social Security ______________________

Social Security Reform Projections do indicate that minor adjustments have to made in order to pay the same benefits to future generations. However, what kind of adjustments, and who has to pay and who receives the most benefits is a political question. The doomsday scenarios are political propaganda! Take a look at countries that already now have a much higher dependency ratio (65+ population to working age group) than we will have in Their experience shows that one can manage to provide a good old age for the majority of retired citizens even when this population is larger than 20% - as long as there is the political will to do it.

Social Security Is more than a regular financial retirement program. It provides Inflation-protected benefits for as long as you live A higher replacement rate for workers with lower earnings Extra benefits for spouses with low lifetime earnings Benefits for disabled, widows and survivors.

Social Security Social Security ______________________ The Social Security program has become the most successful anti- poverty program in the history of the United States. Without Social Security over ½ of all older women would live in poverty.