Enjoying a well-earned retirement in your later years used to be the final chapter of the American Dream, but an increasing number of Americans seem to be heading towards a living nightmare due to a lack of savings, a new survey confirms.
A new survey from the Insured Retirement Institute spoke with 990 Americans between the ages of 40 and 73 in March and found that across generations, people simply do not have sufficient retirement income. More than half of those surveyed have less than $50,000 in savings for retirement, and that amount is unlikely to go up anytime soon for most of them.
Almost 60 percent of workers are putting less than 10 percent of their income into retirement savings, while about a third aren’t even setting aside five percent. This lack of savings is definitely not exclusive to older Americans.
In fact, millennials, many of whom are pushing 40, are even worse off than Gen X or Boomers, as they lag in retirement savings, homeownership, and overall wealth when compared to previous generations.
So is this lack of savings due to bad planning?
No. The biggest issue is that wages simply have not kept up with the increased price of living. People cannot save when they are putting all of their money into survival. While wage gains have increased for the highest earners, the same can not be said for the average earner in the United States, which has made it more difficult for most workers to realistically have enough saved to retire.
Unless that changes, it’s hard to imagine that the amount of savings will improve for most Americans moving forward. Frank O’Connor, vice-president of research and outreach at the Insured Retirement Institute, said that it was “a pretty perfect storm in a pretty bad way for a lot of folks.”
Despite these grim prospects for the financial future, a good amount of Americans still seem to be confident that they will be able to retire on the standard schedule… which is also a little depressing. Of those surveyed, 46 percent said that they plan to leave the workforce at age 65 or earlier.