Typically, bankruptcy is a considerable risk for retirees though recent saving trends portend a rosy picture. Data indicates that the number of retirees with less than $10,000 is declining. It fell from 55% to 42%according to a GoBankingRates survey. Besides, the survey indicated that half of retiring Americans have $10,000 in savings. Nowadays, it is estimated that one needs approximately$275,000 for healthcare expenses upon retiring. Having only $10,000 in savings doesn’t inspire confidence and security, though it’s a start.
This situation is especially bothersome for older individuals. According to the Bureau of Labor Statistics, adults aged over 65 spend $46,000 annually. This means that $10,000 isn’t sufficient. Below is a breakdown of these numbers:
GoBankingRates methodology queried adult financial product consumers in the US to find out what the average American’s saves for retirement. Study participants were categorized into three group’s baby boomers, millennials, and Gen X with each category having 1,000 respondents. During the study, participants were instructed to provide tentative estimates of their retirement savings.
23% of adults aged 55 and above had savings totaling $300,000 through a significant proportion had less. Approximately a third of the respondents have less than $10,000 saved necessitating changes in behaviors to prioritize retirement savings. Those getting ready to retire can contribute a maximum of $18,500 to a 401(k), 403(b), a 457 plans, and Thrift SavingsPlan during 2018. On the other hand, individuals aged 50 and over can add $6,000 as catch up contributions each year to a 401(k) plan. Traditional IRAs and Roth plans are $5,500 per year as well as catchup contribution of $1,000 for individualsaged50 years and above. But why are most people not saving for retirement? Most don’t earn enough, struggle to pay bills, or use their money for emergencies and others think they don’t need retirement savings.
Question: Why is it that you don’t have retirement savings?
|Ages||I don’t make enough||Don’t need retirement money||Paying debt||My job has no plan||Struggling to pay bills (rent, car, mortgage)||Money used in emergency|
Today, the financial health of retirees is an issue of greater concern for the well-being of the nations. The decline in company pensions places the responsibility of creating a retirement plan squarely on the individual’s shoulders. Plus, social security is no longer a sure bet. It was created to help Americans who lack a means of financial support. With many people today signed ontoo the program, it is projected that Social Security will collapse by the early2030s.