On average, older Americans have a more secure retirement than ever. But even as aggregate retirement savings are rising, tens of millions of older adults will be unable to pay their expenses, especially their medical and long-term care costs.
The lesson: It is all about the distribution of savings, not overall savings. Looking just at averages will fool you, and lead to poor policy decisions.
All of this was laid bare at a May hearing at the House Budget Committee. Andrew Biggs, a Social Security and retirement expert at the American Enterprise Institute, used total savings to paint a sunny picture for seniors. Among the messages he delivered: “We’re saving more for retirement than ever. Retirement incomes are rising and poverty in old age is falling. And Social Security benefits are more adequate than you think.”