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"The Retirement Crisis Will Financially
Eviscerate Millions Of Young Americans"
By Epic Economist
"Today’s 65-year-olds can expect to live another 20 years, according to the Social Security Administration. Meanwhile, Baby Boomers — the generation born between 1946 and 1964 — are heading into retirement in droves. And even though higher longevity can be exciting after decades of hard work, it comes with a hefty price tag. Unlike their parents and grandparents, pre-retirees and retirees face a totally different retirement security landscape nowadays. Insufficient financial resources paint a gloomy picture for many of them, who are likely to face a nightmarish personal financial crisis as they age. But they won’t be the only ones. The vast majority of Americans are going to be impacted by the looming retirement crisis, too. According to researchers’ projections, the bottom 80% will be left to pick up this expensive bill. This means that with Social Security funds drying up, workers will be forced to pay increasingly higher taxes to fund retirement benefits for millions of elderly Americans that are at risk of falling below the poverty line. The outlook is scary – especially as we move towards another deep recession, which can prevent even more people from start building their nest eggs for the years ahead. That’s why in today’s video, we gathered very important information about the state of retirement security in the United States that everyone should know.
A new study released by The New School of Social Research shows that as the U.S. wealth gap widens, more and more households with older adults face financial risks. Their updated analysis revealed that most older Americans have made little to no progress toward financial security over the past three decades. In 2018, 47 million households with older adults, or 80%, — were financially struggling or at risk of falling into economic hardship. Moreover, this trend is worsening over time, as 90% of older households experienced decreases in income and net value of wealth between 2019 and 2022.
Furthermore, most of the gains in net wealth recorded until 2018 were due to increases in the net value of older adults’ primary residence. Non-housing financial assets, however, remained relatively flat for the bottom 60% of older adults. This shows that home ownership is still an important vehicle for wealth accumulation in the United States, but as we’re warned about the burst of the greatest housing bubble in history and a devastating stock market crash happening almost simultaneously, the real possibilities for workers to boost their gains and increase their assets are virtually null.
On the other hand, over the past few years, high inflation has forced savers to limit or altogether suspend contributions to retirement plans. Household wealth has taken a severe beating in 2022 amid worsening economic volatility brought on by the Federal Reserve’s interest rate hikes. In fact, the loss of household wealth is estimated at as much as $10 trillion last year
With federal funds drying up, in a not-so-distant future, the bottom 80% of U.S. workers will be facing tax hikes of 25 up to 40% to pay for these scheduled benefits. In essence, to guarantee the retirement of older generations, younger Americans risk being left with not enough resources to start saving for their own retirements.
In other words, the retirement crisis is looming over everyday Americans like a dark cloud, ready to unleash a storm of financial insecurity and hardship. The harsh reality is that many will have to continue working for as long as they possibly can, just to survive. This is a ticking time bomb that will ultimately disrupt all of our lives and tear apart what is left of our economy."
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