Death will be the only retirement for many
One quarter of middle-class Americans have so little savings (and investments) that they don’t think they will be able to retire until they are 80 years old, according to a new report.
That presents a pretty big problem: The average American life expectancy is 78!
It sounds depressing, but for many it’s a necessity. On average, Americans have only saved a mere 7 percent of the retirement nest egg they were hoping to build, according to Wells Fargo’s latest retirement survey that polled 1,500 middle-class Americans.
While respondents (whose ages ranged from 20 to 80) had median savings of only $25,000, their median retirement savings goal was $350,000. And 30 percent of people in their 60s—right around the traditional retirement age of 65—that were surveyed had saved less than $25,000 for retirement.
This is a disaster waiting to happen—in so many different ways.
$350,000 will probably not provide much of an income in retirement. At the current 2 percent yield of 10-year government treasury bonds, you will only earn $7,000 per year! And that is before taxes.
People need to adjust to the new reality! In today’s inflationary—Federal Reserve money-printing—environment, you will need a lot more than $350,000 to retire comfortably.
So what will many of these people have to do? Many are probably planning on heavily relying on Social Security. This too is a doomed strategy. The Social Security fund has no money in it and is now paying out more than it is taking in. The government has spent the Social Security money. And the government is close to going broke too.
As economic analyst Mike Shedlock says in his blog on the subject, it’s “crazy … to expect Social Security to take care of all your retirement needs.”
So how are these people going to live their retirements?
They won’t.
As cnn points out, almost one third of people in their 60s have saved less than $25,000 for retirement! These people will never be able to retire. They will work to feed themselves until they die.
It is great to work past 65 if you can and choose to. However, the problem is that many of these people will not be physically and mentally able to work even if they wanted to.
The burden on taxpayers in America is going to grow exponentially. Eighty million baby boomers are now beginning to retire. It is an unstoppable wave of retirees that is about to slam into America’s already fragile economy. And it is hitting at a time when the economy—and America’s indebted government—can least afford it.
Read “80,000,000 Retirees” to see what the baby boomer generation means for the future of America.
