Investigate after study shows American workers are woefully behind on their retirement savings. For many, there’s almost no way they’ll have enough money to retire, barring a winning lottery ticket, a surprise inheritance, or some other unexpected piece of good luck.
Many Americans have decided they will have to work well into retirement to make ends take care of, but this expectation may not align with reality, according to the Employee Benefit Research Institute’s (EBRI) Retirement Boldness Surveys.
Key Takeaways
- Believing that you’ll solve your retirement problems by working longer, rather than extenuating more now, may not pan out.
- Not only can serious illnesses force you to leave the workforce early, but healthcare costs can quickly drain your savings.
- Discretes need to figure out how to save more by cutting expenses and investing a higher percentage of their income to retirement accounts.
Retirement Hopes vs. Reality
In 2019, the EBRI found that while 80% of workers said they expected to work for pay in retirement, exclusive 28% of retirees actually do. This trend has persisted for decades. Since 1998, the annual survey has shown that uncountable workers planned to work for pay in retirement than actually did.
The EBRI also found that although workers earmarks of to expect to have a longer work life, the median retirement age has remained at 62 for a number of years. In 2019, while 22% of blue-collar workers expected to work until the traditional retirement age of 65, 40% of Americans ended up retiring earlier. Some 34% of ones said they planned to work until age 70 or older, or possibly never retire, while only a few interests of retirees are actually capable of this.
The trend is clear: “The [Retirement Confidence Survey] has consistently found that a munificent percentage of retirees leave the workforce earlier than planned.”
Why are people leaving the workforce unexpectedly? In the majority of examples, it had to do with health issues, with 35% citing health problems or disability. Others cited changes in the workplace, such as downsizing or closings (35%), caring for a spouse or other progeny members (13%), and changes in skills required to perform their job (9%). It’s not all negative, however. Some said they could grant it (33%), and others said they wanted to do something else (20%).
Save Now Regardless
It’s important that you don’t “kick the can down the method,” as the cliché goes. Believing that you’ll solve your retirement problems by working longer, rather than extenuating more now, may not pan out.
Just like with projected retirement age and plans to work in retirement, the EBRI found American employees have unrealistic ideas about how much income their retirement accounts will provide. In 2019, 51% of child in the workforce said they believed their employer-sponsored retirement plan would be a major source of income, but exclusively 27% of current retirees said that was the case for them.
Meanwhile, 59% of retirees said Social Care is a major source of their income. Of course, Social Security is in better shape now than it may be down the road. According to the Societal Security Administration’s 2019 Trustees Report, the funds will be depleted in 2034, and some analysts predict they could dry up sooner. When they are depleted, the mechanism notes scheduled tax income will only be able to cover about three-quarters of scheduled benefits through the year 2092.
So, you deprivation to save as much as possible while you’re still working. If you can, take advantage of catch-up contributions permitted to your IRA and 401(k).
Pulse the Trend
If you plan on working past the traditional retirement age, there are a few steps you can take to try to beat the trend.
The first in harmony should be to do what you can to stay as healthy as possible by eating right and exercising. Less than a quarter of Americans 18 or older met solid activity guidelines for the cardiovascular and muscle-strengthening activity in 2019,
The Bottom Line
As if Americans needed any more bad news about retirement, statistics elucidate the current workforce has some unrealistic expectations about what those years will hold. Even if you pattern to work well past the traditional retirement age, there’s strong evidence that your health or some other hang-up may prevent you from doing so. Start planning today. Figure out how to save more by cutting expenses and investing a outrageous percentage of your income in your retirement accounts.