Aug 14 2020
At the worst of the Great Depression, one-quarter of the U.S. workforce was unemployed. Millions of Americans were homeless and breadlines were common in many cities. The prospects for older Americans was particularly grim—half lived in poverty.
On August 14, 1935, President Franklin Roosevelt signed the Social Security Act, stating that “we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age. This law, too, represents a corner stone in a structure which is being built but is by no means complete...”
Social Security not only has prevented tens of millions of men and women from falling into poverty, it has become the bedrock of retirement security for all Americans. However, the “three-legged stool” of retirement—Social Security, pensions and private savings—has been slowly coming apart. Since the late 1980s, the percentage who receive traditional pensions has been cut by more than half. Today, less than half of low wage earners have defined contribution accounts like a 401(k) or IRA. 35%of near retirees—those ages 55-64—have neither a defined benefit pension nor a defined contribution plan.