It’s an unfortunate fate which appears to obviously be posing a tremendous struggle for our nation as a whole.
New York, NY (PRWEB) June 26, 2013
Today, GreyWingFinancial.com personal finance and economic magazine for seniors released its observations regarding new study results revealing that retirement savings in the United States are a whopping $14 trillion below what is actually needed.
According to a June 26th CBS Money Watch article by Stevie Vernon, the National Institute on Retirement Security (NIRS) recently published the results of a study which analyzed the condition of U.S. consumers’ retirement savings. The study looked at the state of Americans’ savings side-by-side with benchmarks of where the numbers need to be to maintain living standards in retirement, and consumers’ savings came up about $14 trillion short. Vernon reported that the results revealed that 45% of working-age Americans and nearly a third of 55 to 64-year-olds have no retirement savings whatsoever.
GreyWingFinancial.com attributes the poor retirement planning to the lack of pensions, dwindling Social Security, and a still-recovering economy. New York Life Insurance Company offers this advice, “Times have changed and you just may not have the financial resources you once had anticipated having, so it’s important to accept the limits and to plan your future spending accordingly.” GreyWingFinancial.com is quoted as saying, “There was a time not so long ago when it was expected to work at one’s job until you retired, and then receive your pension plan. Your pension, along with Social Security and your own savings, would help you go the distance in terms of maintaining your standard of living during retirement. But take into account that pensions are increasingly rare these days, and tag on the fact that Social Security is 32% underfinanced, THEN take into consideration that people are living much longer these days and therefore need more money for retirement, and you’re left with Americans needing to save for a longer retirement all on their own. It’s an unfortunate fate which appears to obviously be posing a tremendous struggle for our nation as a whole.”
GreyWingFinancial.com speculated that with retirement savings being $14 trillion below the threshold, many other industries, businesses, and generations will be affected. They pointed out that younger generations might find themselves in positions where they will need to help fund the retirements and/or healthcare of their older parents. 60-somethings may choose to work longer, delaying retirement and opting to keep their salaries as well as health benefits through employers, to make up the difference. This would also be denying positions to the younger employees waiting in the wings for job openings. MetLife.com relayed that, “some financial planners estimate that during retirement, you will need at least 80 to 100 percent of your current income to maintain the same standard of living.”
There may be businesses that profit from the deficit, but only short-term. GreyWingFinancial.com suggested that as Americans work longer and retire later, they’ll need to pay more to start up Medicare, putting a touch to more money in the federal government’s pocket. Also, industries such as life insurance companies, whose clients are generally working citizens--whose death would provide a financial loss to their family and/or spouse--may see more consumers delaying parting with their policy as they continue to bring home salaries. Companies that offer especially cheap life insurance might in particular see an increase in their profits, but overall GreyWingFinancial.com views the retirement savings deficit as a lose-lose for everybody involved.
In the above-mentioned Money Watch article, Vernon stated that employer-based retirement plans are continuing to drop, currently being at the lowest level since 1979, and providing only 52% of Americans with plans as of 2011. Vernon reported that according to Fidelity Investments and Life Insurance Company, Americans should have roughly seven times their annual salary saved in order to live out a comfortable retirement by age 65. Conversely, Aon Hewitt, a former life insurance company that now does consulting, reported in the article that a 65-year-old should have closer to eleven times their annual salary saved.
GreyWingFinancial.com is an economic and finance online magazine targeted towards retirees, soon-to-be retirees, and seniors. The online column provides retirement advice to this demographic, reporting on topics and current events having to do with saving, investing, moving in retirement, and other relevant subjects revolving around retirement.