Retirement Security

Report Outline
Retirement Income and the Economy
Growth of Public and Private Pensions
Prospects for More Retirement Security
Special Focus

Retirement Income and the Economy

Perils to Elderly From Recession and Inflation

Recession and inflation, the twin horrors of the current economic situation, are stirring new fears among those whose working years are nearing an end. The reason is that their prospect for a reasonably comfortable income in retirement—an expectation nurtured by maturation of the Social Security system, growth of private pension plans, and rising interest on savings—no longer seems quite so secure as in the immediate past. While recent increases in Social Security benefits, partly tied to rises in the Consumer Price Index, help meet the inflation threat, payments to many beneficiaries are still no match for the cost of living.

There are other threats arising out of the overall economic situation: the declining value of pension trust funds and personal holdings because of the stock market slump; rising unemployment which deprives pensioners of extra-income odd jobs and reduces payments into public and private pension funds; and the expected cutback of government expenditures for public services utilized by the elderly.

It is no wonder that the trend toward early retirement, which had been building up in recent years, has begun to slow down as older workers cling to their jobs as long as possible. On the other hand, where unemployment is most severe, the retiree on fixed income may be the most favored member of his community. An ironic situation may develop in which the meagerly but regularly paid pensioner will be helping to feed the young, able-bodied worker unable to find a job.