Thursday, October 6, 2022

"The Coming Retirement Crisis Will Wipe Out Millions Of American Families"

Full screen recommended.
"The Coming Retirement Crisis Will Wipe
 Out Millions Of American Families"
by Epic Economist

"The worsening retirement crisis plaguing the U.S. means that over half of the population will never be able to hang their work hats up, relax and enjoy their senior years. And many of those who do retire face the risk of falling into poverty in old age as they run out of funds and Social Security benefits fail to provide an adequate safety net for everyone. On top of that, given that the price of pretty much everything we buy and consume on a daily basis continues to reach one record high after the other, and the fact that 61% of Americans are living paycheck to paycheck, it’s never been harder for U.S. workers to start saving for retirement. In other words, today’s cost of living crisis will be tomorrow’s retirement crisis, and all of us are going to be dramatically affected by it.

For years, we have been warned that our country was marching toward a retirement crisis of epic proportions. But still, nothing has been done to effectively prevent things from getting worse, and conditions have become increasingly more difficult for U.S. workers to have the chance to put a percentage of their incomes aside for the future. The truth is that our retirement system is broken, and at this point, everyone agrees that it is heading for a major disaster.

Data released by the National Institute on Retirement Security reveals that over the past 35 years, 401(k) participants are not contributing regularly, asking for withdrawals, and not repaying their loans. On top of that, “we have a lot of individuals who have nothing saved for retirement, about 40 percent of the workforce,” said Diane Oakley, the executive director of the NIRS, adding that when her organization used census data to assess whether households were saving enough to retire with eight times their projected income, a very conservative estimate of retirement preparedness, “we found that 60 percent of households weren’t on track.”

Adding to this dire picture is the fact that for the first time since 1973, unemployment among workers over the age of 55 has remained higher than that of mid-career professionals for more than six months. Around 30% of workers now plan to postpone retirement and work longer. Others, facing poor working conditions, may instead choose to retire sooner and with less saved. For many, entering retirement early will mean balancing the rising costs of healthcare — estimated at nearly $300,000 for an average 65-year-old couple — with food, housing, and expenses related to long-term care.

Bills never seem to stop piling up, even as we get older. Simply put, many older workers who urgently need to contribute additional savings for retirement may never be able to do so. The consequences of this worsening crisis are going to be severe for both American families and the national economy, as a large share of households are forced to significantly reduce consumption in retirement and will have to rely heavily on their families, charities, and the government for help to make ends meet. Instead of having control of their economic lives, millions of Americans will have to muddle through their final years dependent on others for financial support and seeing their standard of living collapsing right before their eyes while the American dream slowly dies."

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