Bad Retirement Plans Can Cause Housing Issues in the Near Future

Roughly around 10,000 people turn 65 years of age every single day. That number will continue to grow as studies show that 132 million people will be at retirement age or older by 2030.

We have been told to believe that our retirement years will be filled with relaxation and being able to do things we have always wanted to do. However, this may not be possible for many, as they are concerned about receiving a stable income when it comes to retirement.

Over the last decade, research shows that too many Americans are not ready to support their necessities as they get closer to retirement. Hopefully, these terrifying tendencies can help us learn some valuable lessons to be prepared for the future.

In 2018, a study was done by the Federal Reserve Bank in St. Louis, which revealed that not every employee had access to a retirement plan that was employer-sponsored. The study showed that around 56% of employees had the ability to enroll in a 401K or other plans that are employer-sponsored. Those that did have access and participated did it at low amounts.

For the employees that did not have access to those plans, only 20% of them were investing in retirement accounts, such as an IRA. The average retirement account had the worth of only $25,000 for employees around the ages of 56 to around 62 years old.

Another study from the Nationwide Retirement Institute that was released this year surveyed 1,315 people over the age of 50 and up, which shows that almost half of those that are planning to retire within ten years or those who are retired plan on using Social Security as their primary retirement income. The average American is only expected to receive $17,064 annually from Social Security, which breaks down to $1,422 a month.

Here are some of the things we can learn from these studies:

No matter where you may be in your life, it is very important to start contributing to your retirement as soon as you are able and take advantage of any employer-sponsored plans where contribution matching is available.

Also, be sure to take full advantage of Social Security benefits by waiting until the age of 66 to start receiving payments. You can start at age 62, but the payments will be significantly more if you hold off until the age of 66. Remember, you may wish to consult with a financial advisor when it comes to making big financial decisions regarding your retirement.

There is also another lesson we can learn from a study done by Havard’s Joint Center for Housing Studies’. It showed that one in three Americans past the age of 65 were spending over the recommended amount of one-third of income on housing or other expenses regarding property. This is having millions of adults cut their spending on other important things such as food and healthcare.

As housing prices continue to go up, affordable housing needs will be in greater demand. A prime example of one state would be California. It is stated that at least 2.5 to 3.5 million units are necessary to help demands. As more people are headed towards retirement, the demand for senior housing that is inexpensive and of high quality will also be on the rise.

Eventually, our nation will need to really have a conversation on creating senior-friendly communities and plans that will ensure the safety and comfort of these people’s lives.