Why More Americans Than Ever Are Not Prepared For Retirement

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Why More Americans Than Ever Are Not Prepared For Retirement

by | Aug 29, 2019

According to the Wall Street Journal, the generation currently reaching retirement age is the least prepared since Harry Truman was president back in the late 1940’s and early 1950’s. Americans nearing their golden years are concerned that there may not be enough in their retirement accounts to live the retirement they planned. 
With the recent volatility of the stock market, people are growing more and more concerned over their financial future. These days there are more and more people living from one payday to the next and there is growing concern that most retirement funds aren’t going to be enough. Per the Wall Street Journal, about 40% of households headed by people between the ages of 55 and 70 will not be able to maintain their current standard of living once they retire. 

There are several contributing factors to this scary situation. Close to 10,000 baby boomers are reaching retirement age every day and the younger workforce isn’t able to contribute enough to cover Social Security costs. Some studies have also shown that more than half of those in the 60’s were financially supporting either a child or elderly parent. Add to this education debt, unexpected medical bills, and the aftermath of the 2008 stock market collapse and it’s easy to see why this issue deserves more attention. 

This issue did not come out of the blue. Washington has been aware of an impending retirement crisis but interventions have been pushed aside to deal with more time-sensitive issues like healthcare, job creation, and any number of foreign and domestic issues. 

The recent market fluctuations have been a bit unsettling for those preparing to retire, particularly since many are just starting to recover from the financial collapse a little more a decade ago. Time is running out and those whose job it is to figure out a solution need to start paying attention. The combination of this loss of retirement savings with talk about how most people are having trouble making ends meet is having a real effect on how people view the economy. 

While most people still have a positive view of the economy, that attitude is steadily declining and has been since the last presidential election. Most people do not feel they will be directly affected by a recession but when specifically asked about retirement, about 40% of people surveyed felt that they would not be able to retire when they wanted to. Some thought they may have to work a few more years while others were unsure if they would ever retire.

Saving for retirement used to be simpler but the unplanned costs of taking care of elderly parents, paying off student loans or medical bills, or helping adult children get on their feet is really taking a toll on the financial future of a lot of Americans who are quickly reaching retirement age. While Washington may not be paying attention now, soon, they will not have a choice.

Any opinions are those of Thomas Fleishel and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. 

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