This is a kind of depressing article, but it is also truly realistic. There is data shows that, a quarter of middle-class Americans are now so pessimistic about their savings that they are planning to delay retirement until they are at least 80 years old -- two years longer than the average person is even expected to live. The main reason is that, on average people cannot save as much as the need before their retirement.
I think this situation will bring many other issues. For example, the limited job chances for young people, especially new-workers, will be decreased by this extension of retirement age. This change could be another challenge for the job market in the future.
The primary concern for retirement today is the "three-legged stool" of pensions, savings-investments and Social Security has lost two legs for many people.
ReplyDeleteCompanies that provided pensions now offer 401(k) plans that are subject to the volatile market, conservative savings may pay 1% in a CD, IRAs and Roth IRAs also are slammed in the market, and there's no need to discuss stocks or ETFs and bonds paying 2.5%.
For the past decade, the responsible saver who put away 10% of income has been shafted in gambling scams by bankers and Wall Street that have been protected by the "laws" and sloppy regulation enforcement provided by their paid politicians.
That leaves Social Security, an insurance plan meant to provide about 33% of a retired person's needs but is fast being relied on by many people for 75% of their expenses. At the same time, cuts in Social Security are being considered to help balance the deficit. A national train wreck in the making
One of the main reasons is the shift from defined pension to defined contribution...
ReplyDeleteAs such individual cannot rely on their bosses...
As such they have to rely on social security etc...
Any policy making you dependent on it is not a good policy
Social Security is spoiling the American public
Its true though people started to retire at an later age since they have to support themselves. They can't rely on SS benefits which will not be enough to last them so as the 401K pension plan. As well as the health care benefits. People have to do what ever it takes to survive.
ReplyDeleteI never really thought about the impact this would have on the younger job force entering the working world. But it is interesting to see that by having more older people stay in their careers longer than expected, is actually reducing the amount of jobs for the younger generations.
ReplyDeleteI feel if people retire at a higher and higher age, that life expectancy may decrease because of the added stress a job can cause. The time to start saving for retirement is now if you want to retire at a reasonable age. Not to mention the Social Security Trust Fund running out in the near future.
ReplyDeleteIt is interesting that many people now believe they will have to work until at least 80. This is such a large difference from the average retirement age of 65. It really shows that people's views have changed (especially because of Social Security and Medicare). While most people seem upset about his, it is interesting that there are some people who genuinely wish to continue to work past the retirement age.
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