Study after study has shown a substantial portion of workers don’t have any pension or savings whatsoever.
Of course, this impacts these individuals directly. But it’s also a threat to the financial fabric of the rest of the country. They will either need to work long after they might otherwise have retired (which leaves less space for younger workers to break into new careers) or if they are unable to work, their cost of living after a meager Social Security check will be passed on to taxpayers.
The reasons are multi-pronged, but it has to do with:
- Increased cost of living;
- Stagnant wages;
- The collapse of the housing market;
- Mounting debt.
The Federal Reserve’s 2014 Survey of Household Economics and Decisionmaking revealed nearly 40 percent of survey respondents planned to work as long as they possibly could or had no intention of retiring.
Additionally, more than one-third of adults in the workforce had no retirement savings or pension – and that included nearly 25 percent of people over the age of 45. Even among workers who are trying to scrimp and save, less than half are “very confident” about making good investment decisions in order to manage their retirement accounts.
Among workers who earn less than $40,000 annually, more than half say they will work as long as they possibly can or won’t retire at all. And to illustrate how this has become the new normal, 65 percent of those workers said they believed their family was “doing okay.”
Research conducted last year by CNBC revealed almost one-third of those workers who had saved, had cobbled together less than $1,000 total. And when the Employee Benefit Research Institute (EBRI) analyzed the number of people close to retirement with savings, nearly 60 percent had less than $25,000 set aside in 2013. That’s compared to 49 percent who had that amount saved in 2008.
To put into perspective how inadequate this is, a report by HealthView Services has estimated that in order to cover basic medical expenses after retirement, each worker needs about $267,000.
Years ago, most Americans retired at around age 65. This is no longer the case. As USA Today reported not long ago, there are an increasing number of workers over the age of 75. In the last two decades, the number of workers 75-and-older in the workforce shot up by 77 percent. Of course, part of this is the fact that people are living longer, healthier lives and that the kind of work many of us do is not nearly as labor intensive as those of generations’ past. Still, a significant factors is that many of these workers do not have a choice.
Many financial planners say if you can start saving when you’re in your 20s, you have a leg up. But that’s too often – and increasingly – not the reality.
A more recent study conducted by GOBankingRates reveals that half of the 1,500 people surveyed have less than $10,000 put away.
Our Miami debt defense lawyers can help you overcome some of the hurdles that can stand in your way when it comes to saving for retirement.
If you’re battling debt collection in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.
Not as many Americans saving for retirement, study finds, March 21, 2016, CBS Los Angeles
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Naked Capitalism: Robo-Signing an Ongoing Plague, March 7, 2016, Miami Debt Defense Attorney Blog