I know I talk about retirement a lot, and to be honest, I’m not about to stop anytime soon. Many people think that retirement is like another lifetime when they are in their twenties, and life is good during this period, since the responsibilities are few. Then comes marriage and before you know it, the first kid is on the way. Now life takes a whole new meaning, and you are forced to look at the big picture, mortgage and the added responsibilities that come with raising a young family become your major priority, and its also during this time that most people start saving for their retirement. But before you know it, the kid that was running around in diapers is about to join college, and looking at the fee structure you know deep down that your meagre savings are about to suffer a major dent, not to mention that they are one or two kids that will join their brother or sister in college in a few years. For most of us, there will a sigh of relief when the last kid leaves college and you no longer have to think of college fees any more. At this time, you’ll probably be in your mid-50s and retirement is beckoning. It’s only after looking at your retirement fund that reality really hits, that you don’t have enough to last you more than 15 years, if you are lucky.
Now this is reality and many retirees are in this financial dilemma, and its a high time the younger generation realized that its time to wake up and do something because things are about to get worse. Maybe the following article by Dave Bernard will just shed some light on the reality of current and future retirement situation in this country, and if this does not wake you up, I don’t know what will.
For the next 20 years, about 10,000 baby boomers will turn 65 each day. Some have been preparing diligently for their retirement by building savings, and are looking forward to having the freedom to do what they want to do when they want to do it. Other boomers may not have begun to contemplate how retired life will look because they are caught up in living for today. As this massive generation crosses into what has historically been retirement age, they will face many new realities, and they may not all be pretty.
The recent economy has not been cooperative for investors attempting to build a nest egg. Those nearing retirement age have the most to lose if the market declines and limited years to continue contributing to retirement accounts. At the same time, the average life expectancy continues to rise, which is even more years of retirement baby boomers need to save for. Here are eight startling retirement facts to ponder:
- One in six older Americans lives below the poverty line, which is $22,350 for a family of four, according to the U.S. Department of Health and Human Services. That amount is not much for a single person, let alone a family of four.
- The current ratio of working age citizens between 15 and 64 to those over age 65 is 5:1. By 2050 this ratio will drop to 3:1. This means we will have a smaller proportion of working people supporting increasing numbers of retirees.
- The ranks of senior citizens are growing rapidly. There are now around 40 million senior citizens, but that number is expected to increase to 89 million by 2050. The aging population will impact everything from housing and health care to travel and employment.
- The cost of assisted living facilities has risen to a national median rate of $3,300 per month, which works out to be $39,600 per year. The highest median rate is in Alaska at $6,813 per month.
- Americans 55 and older now account for 20 percent of all bankruptcies, with the majority due to medical and funeral expenses. In addition, older Americans tend to have more credit card debt than younger Americans. Without delaying retirement, it will be hard for baby boomers to get ahead of their growing debt.
- Due to the recent economic downturn, baby boomers born between 1948 and 1954 will need to save an additional 4.3 percent of their annual pay to counteract the impact of the financial and housing crisis in 2008 and 2009, according to Employee Benefit Research Institute calculations. For many people this will require working beyond traditional retirement age in a job market already tight and challenging for older workers.
- Successful retirement planning requires consistent saving to provide for a time when income is no longer generated from your job. However, 35 percent of Americans say they don’t contribute to retirement accounts like a 401(k) or IRA, according to a 2009 CareerBuilder survey.
- Age discrimination on the job is an increasingly common occurrence as more seniors remain in or re-enter the job force. In a recent study published in the journal Research on Aging, 63 percent of older adults say they have experienced discrimination.