There’s an old country song that says, Everybody wants to go to heaven, but nobody wants to go now. Something similar can be said of retirement in America. Everybody wants to retire, they just can’t do it now. It’s not because they don’t want to. It’s because they can’t. A huge number of American workers are woefully short of having enough savings to support them in retirement.
According to a new survey by Bankrate, 36% of Americans have never had a retirement account. 52% of all workers think they’re nowhere close to having enough money saved. And 16% aren’t sure if they’re on track to have enough retirement savings.
To compound the problem, many people with retirement accounts have raided them for emergencies. Of those with retirement accounts, 51% have taken early withdrawals, including 20% who have taken withdrawals during the COVID pandemic just to pay the bills.
63% of respondents to the survey say they’re saving as much or more than they did before COVID, but the remaining 37% say they’re saving less than before, for a variety of reasons:
- Loss of income
- Additional expenses
- Additional debt
- Wanting more cash on hand
- Helping family members
Concern about being prepared for retirement is not new. The Social Security advice site, SimplyWise conducted a survey at the height of the COVID pandemic in 2020 to find out how Americans feel about their retirement:
- 56% are afraid the Social Security trust fund will dry up before or during retirement
- 49% fear outliving their savings during retirement
- 40% are concerned they won’t be able to retire at all
- Over half of respondents believe their quality of life with suffer after claiming Social Security retirement benefits
- 67% of working people plan to continue working in retirement
- One in three saved $0 for retirement in the last year. Women saved even less than men; 37% of women saved $0, and 50% saved under $500.
- One in five people believe it’s likely they will draw from their 401(k) for cash before retirement, including 1 in 3 of those who have lost work
- 26% say they would postpone retirement altogether
What’s the answer? That’s been debated ad nauseum. Saving more, if you can. But for those who can’t, working longer will become more common. There’s already a graying of the workforce as Baby Boomers decide to work longer. Right now, about 25% of the workforce is made up of Boomers. That’s expected to grow to 31% in the next five years.
Congress has loosely considered raising the maximum age to receive full Social Security to age 70 from its current age of 67. But Congress has kicked the Social Security can down the road for decades with nothing done. The Social Security Trust Fund is expected to be empty by 2037.
Or maybe we revert back to having multiple generations live in the same house, as was customary until the 1940’s and the responsibility of caring for retirees falls on the younger generations of the family.
Yep, everybody wants to retire, they just can’t do it today.