If you're facing retirement with financial anxiety - and who isn't? - chances are you worry about the adequacy of your savings and investments, and perhaps about the reliability of a pension. Both those pillars of American retirement look disturbingly wobbly nowadays.
By all rights, you should be much less concerned about the third pillar, Social Security. Surprisingly, that's not what the evidence suggests.
Ask a sampling of millennials whether they expect to get Social Security when they retire, and 9 of 10 will say either no or with reduced benefits, according to a recent Pew study of those who came of age in the shadow of 9/11 and the Great Recession. Even their elders aren't much more confident. Earlier Pew surveys showed large majorities rating the system's health as only fair or poor.
To Michael Lind, those numbers are a testament to the power of people like Pete Peterson, the Wall Street billionaire who has long warned of the looming threat from "entitlements" and has helped sway a broad, bipartisan swath of policymakers, pundits and journalists.
Worries about the future costs of health-care programs such as Medicare and Medicaid are real enough. But when it comes to the formula-based costs of Social Security, says Lind, policy director for the New America Foundation's Economic Growth Program, there's a huge gulf separating elite opinion from both the evidence and the needs of the vast majority of Americans.
Lind is part of a growing band of policy wonks and lawmakers trying to push back against Social Security fearmongering. Perhaps their most full-throated expression came in December 2012, when lawmakers played chicken over taxes and spending as the "fiscal cliff" loomed and a Steven Hill column in the Atlantic declared: "Don't Cut Social Security - Double It."
Crazy, you say? Last year, Lind joined with Hill and two other coauthors to lay out a case for a different approach to expanding Social Security - one designed to replace roughly 60 percent of the average American's preretirement income, near the European Union's average of 62 percent, rather than today's 40 percent.
Lind concedes their goal is partly to shift a debate they believe is too narrowly focused on a Hobson's choice between trimming benefits and raising payroll taxes - even if simply lifting the cap on wages subject to the tax, currently $117,000 a year, would come close to making today's system solvent for the next 75 years.
Instead, they want to turn people's attention to the crucial role that Social Security already plays for today's retirees, and the increasing burden it must shoulder because of economic trends - particularly the demise of traditional "defined-benefit" pensions and what some call the failed 401(k) experiment, because people aren't saving enough.
Those private, "defined-contribution" plans were first offered as perks for executives not covered by pensions, Lind says. But companies, spurred by the desire to cut costs and perhaps by the unintended consequence of a federal law requiring them to open the plans to labor as well as management, embraced them as an alternative to pensions.
Economist Robbie Hiltonsmith, another of Lind's coauthors, says the numbers speak for themselves. Among families in the decade preceding retirement age, only 60 percent had retirement savings at all, according to the most recent Federal Reserve data. And the median family in that group had about $100,000 in savings - enough to add just $5,000 to $7,000 a year in annuity income, Hiltonsmith says.
Even data from the industry-backed Employee Benefit Research Institute isn't much more hopeful. At the end of 2011, EBRI estimated the average 401(k) balance for plan participants in their 60s at $135,000 - an average pulled upward by wealthy savers. In other words, a two-worker family would be lucky to face retirement with as much as $300,000 in accumulated savings.
And what about traditional pensions? Such plans are increasingly rare among private employers, and many members are in plans that no longer accrue benefits or have too few assets to meet their obligations. Public-employee plans are at risk in the many states that have left them underfunded, including Pennsylvania and New Jersey.
Lind and Hiltonsmith propose a supplement to traditional Social Security - they call it "Social Security B" - that would add a flat $11,699 a year to all recipients' benefits. They offer various strategies to pay for it - Lind's favorite is a European-style value-added tax with exemptions to spare essentials like food and medicine.
The essential idea is shifting the nation's course away from what political scientist Jacob Hacker has called "the privatization of risk."
The other pillars of our retirement are weak and shaky. Social Security does its job. Let's focus on improving it, not undermining it - or fearmongering.