You should be afraid, very afraid. Or so I'm told when I imprudently open email solicitations and read the news articles linked in those solicitations. Why should I be afraid? Because, if I'm like most Americans, I am approaching old age with too little savings to enjoy a secure and adequate retirement. The frequent warnings may contain a kernel of truth (see here, here, and here). Still, it's hard to see much evidence for the scary headlines when we examine the relevant income statistics. They show the elderly and retired are doing pretty well. What is more, their incomes compare favorably to those of the nonelderly. Their incomes are considerably better than the incomes of their parents and grandparents when they were the same age.
Consider the official poverty statistics, which classify Americans as poor or not poor based on inflation-adjusted cash income thresholds that were established several decades ago. In 1959, about 35 percent of the population past 65 was classified as poor. This was by far the highest poverty rate of any age group. Thanks to liberalized Social Security benefits, broader participation in workplace retirement plans, and higher savings, the old-age poverty rate fell to 15 percent in 1979 and to just 9.2 percent in 2017. Income poverty in the elderly population is now lower than it is among nonaged adults. It is substantially lower than the poverty rate among children.
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