Cornell Law Review Volume 92 Issue 2

Transforming the Role of the Social Security Administration

Americans depend on their Social Security benefits because they do not save. Individuals who have discretionary income, and therefore could save for retirement, do not save because they do not plan. Financial planning for retirement requires both motivation and knowledge. However, workers under age thirty appear to lack these qualities; many procrastinate in saving and are often not knowledgeable investors.

Motivation to save and the related problem of retirement financial literacy have moved to the forefront of the national policy landscape due to the projected future financial insolvency of the Social Security system. Under the current Social Security benefit structure, experts estimate that workers retiring in 2030 must accumulate retirement assets sufficient to replace 40% to 55% of their pre-retirement earnings to maintain their standards of living in retirement. With the future level of guaranteed monthly Social Security income uncertain due to proposed reforms, it has become even more important for young workers to save and plan—using their own resources—for a financially secure retirement.


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