Defenders of Social Security point out that without it, nearly four million more older Americans would have been counted as poor during 1997. But analysts say that living above the officialpoverty income level in retirement years is not all that difficult even for those with low incomesduring their working years. All an elderly person had to earn in 1997 to be above the povertythreshold for persons 65 or older was $7,698. To receive that amount of income, all an elderlyperson had to have at age 67 is $192,450 in government bonds assuming current interest ratesand that the individual's net worth is protected from the erosion of inflation. To achieve thatsum, all a person had to saveand invest from age 22 was an average of $347 a year -- rangingfrom $195 beginning 45 years ago to $498 last year. This means that even low-skilled, minimumwage workers would have to save only 4.6 percent of their incomes. Workers earning the medianAmerican wage would have to save less than 2 percent of their income -- equivalent to nineminutes' work a day. The problem is that the typical elderly person only had about $106,000 innet worth in 1996, the latest year for which data is available. Without doubt, many of today'selderly went throughtheir productive years without saving enough, seduced by the prospect thatSocial Security would provide amply at retirement. In a recent report, the U.S. General Accounting Office warned that the long-term prospects forthe Social Security system may be even worse than we think. It is already well-known that oncethe baby-boom generation begins to retire in 2010 this will place unprecedented financialpressure on the system. By 2014, current tax revenues will be insufficient to pay current benefits,and by 2029 the Social Security Trust Fund will be exhausted. But demographic factors are accelerating Social Security's problems. Among the reasons: * Growing life expectancy is increasing the retired populati...
