Professor of Social Work and Public Administration, Syracuse University
Originally Published 12/28/08, The New York Times Online
The availability, stability and value of traditional defined benefit pensions are diminished. Americans are experiencing dramatic losses in 401(k) and I.R.A. retirement savings accounts. Home equity is shrinking. Employers have been bailing out of retiree health plans. Unemployment is increasing and now, faced with mounting pressures, some employers are reducing contributions to 401(k) plans.
This unfortunate state of affairs serves to remind the nation of the importance of the core mission of Social Security — to provide widespread and basic protection against loss of income due to death, disability or retirement.
Although this comes as a surprise to some, Social Security is fundamentally sound, backed by the full faith and credit of the United States government. Projected financing problems, though real, are relatively modest, manageable and many years in the future.
For those of us fortunate enough to have retirement savings, we can only wish that the value of the other assets in our portfolios are as well positioned to withstand the current economic uncertainty.