Americans Fear Not Having Enough Money for Retirement
June 13, 2014
A recent Gallup poll finds that 59 percent of Americans are worried that they will not have enough money for retirement, according to a report in the Fiscal Times.
The poll indicates that a lack of retirement savings is, by far, the biggest concern among those surveyed. No longer do Americans feel that they can rely on Social Security and employer-sponsored pension plans, and their personal savings have suffered under a long stretch of high unemployment and stagnant wages.
Research indicates that Americans are right to be concerned about their retirement:
- According to the Center for Retirement Research (CRR), 53 percent of households are at risk of falling more than 10 percent short of having a retirement income that would allow them to maintain their standard of living.
- The CRR also reports that more than 40 percent of retirees are at risk of not having enough money for daily needs, out-of-pocket health expenses or long-term care.
- According to the National Bureau of Economic Research, almost 25 percent of Americans would not be able to come up with $2,000 within 30 days, if necessary.
The Bipartisan Policy Center (BPC) has outlined three main reasons that Americans lack sufficient retirement funds:
- Workplace defined benefit plans have been replaced by defined contribution plans, which can provide less in long-term benefits.
- Americans' personal savings have declined, with the savings rate falling from 11 percent during the first term of President Reagan down to 2.6 percent in early 2013. Today, the rate sits at 4 percent. Only one-fifth of Americans are saving 10 percent of their income.
- Individuals are taking more money out of their retirement accounts due to hardship, job changes and loans.
Source: Eric Pianin, "Retirement Savings Fears Grip Americans: 'I Don't Have Enough'," Fiscal Times, June 9, 2014.
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