Retirement Crisis in America: 19 Million Americans Can't Retire
Updated on Jun 15 2018
It’s no secret that Americans are consumerists, but sadly this lifestyle is creating an epidemic of financially unprepared aging Americans who can’t afford to retire.
A recent Bankrate survey found that the majority of Americans don’t know how much money they need to save for retirement, and a surprising 19 million Americans don’t feel confidant they will be able to retire at all.
The survey also found that 61 percent of Americans are unsure about their savings. For those that do have an estimate, the median amount is $650,000. Roughly nine percent of baby boomers, 54- to 72-year-olds, said they never plan to retire.
What Does This Mean for Seniors in America?
The reality is that people can’t work forever. Seniors are often forced into retirement for a multitude of reasons, including poor health, caregiving or job problems. Women are especially vulnerable to an unexpected early retirement. If they haven’t saved enough for retirement, they do their best to subsize what savings they have with government resources and programs. Unfortunately, this is draining America’s resources, and the ‘Silver Tsunami’ of aging baby boomers is creating even more deficit issues. Many seniors being forced into poverty and relying on their family members to help them financially.
The good news is that there’s still time to build a nest egg to help with a solid retirement savings investment plan, even if you’re in your 40s and 50s. The younger you start healthy financial planning and savings habits, the better, as compound interest helps maximize return; but there are investment and saving strategies for every age.
What Can You Do to Save for a Comfortable Retirement?
Putting away at least 10 percent of you pay each paycheck into a retirement investment is rule number one. If you can afford to put away more; that’s even better. Bankrate analyst Tahylor Tepper comments:
“The key to retirement savings is to actually save for retirement. Put away ten percent or more of your pay, including any employer contributions, into your retirement account and do it yesterday. Online calculators can help savers estimate how much they need to sock away.”
Diligence to a strict budget and picking the right financial holdings can help you see significant return. An expert financial advisor can help you determine what investment strategy for your retirement portfolio makes the most sense for your unique situation.
Think about this: More than half of Americans have sought advice on retirement planning, according to Bankrate. The survey found the following:
- 26 percent of respondents consulted a personal financial advisor
- 21 percent asked family or friends
- 11 percent used an online retirement calculator
- 10 percent contacted a bank or financial institution
A small percentage of Americans relied on expert commentary and roboadvisors. The investors who consulted experts typically felt the most confident on their return on investment and had the most peace of mind about their retirement savings.
How Much Do You Need to Save for Retirement?
Everyone’s retirement savings and desired nest egg is different. This is because people have different incomes, spending habits, mandatory expenses and lifestyles. Geographical location and health concerns also influences how much a retirement is going to cost. Working with a financial advisor can help you determine your investment time horizon and ideal nest egg for retirement. According to the survey, people responded they need the following in retirement savings:
- Seven percent of respondents said they need between $250,000 and $500,000
- Eight percent believe they need to save either $250,000 or less
- $500,000 to $1 million, or over $1 million
Typically, people are not saving enough which is why it’s even more important to get a professional fiduciary or financial advisor’s help. For example, more than half, or 61 percent, of Americans expect little to no contributions from Social Security, and 20 percent said the program will likely fund about half of their retirement savings. Another 17 percent said most to all of their retirement money will come from Social Security. Everyone needs to consider that they need to rely on their own savings, not just Social Security, for their retirement savings and financial future.