In the midst of widespread recession aftermath, it’s no secret that the past few years have been financially debilitating for a lot of households, which in turn has forced people of all ages back to square one when it comes to saving. And for older workers, that means the retirement picture isn’t looking pretty. In fact, a work-free future is slowly becoming a tradition that more and more Americans will never get to enjoy, or at least have to delay.
So is this the beginning of the end of the American dream of retirement? In the long run, probably not. But with values of investment portfolios and 401Ks going down, down, down over the past few years, many workers in their 50s and 60s now find themselves far short of the amount they’ll need to retire comfortably. In a lot of cases, unemployment forced people to divert retirement savings to fill day-to-day needs. Another setback many Americans weren’t expecting to face was massive declines in property value that drained the home equity some thought would be their retirement gold mine.
Whatever the reason, the reality is, way too many people are approaching retirement with nowhere near the amount of money they’ll need. Data show that more than half of all workers, 56 percent, say they have less than $25,000 in savings, according to a survey by the Employee Benefit Research Institute.
The numbers are just as stark for people who’ve already retired. More than half of all retirees, 54 percent, say they have less than $25,000 saved. That’s a big jump from the 42 percent who were in the same situation in 2006.
This isn’t a pretty picture for an entire generation of Baby Boomers quickly approaching retirement age, but it’s also a dire situation weighing on Americans of all ages. For many, the increasing gap in savings has caused even the idea of retirement to almost completely disappear. Nearly 30 percent of all workers surveyed aren’t confident they’ll have enough to retire. That’s the highest level in 21 years that EBRI has tracked the statistic.
Ok, so Americans are hurting, that’s nothing new. But here’s the good news: It’s never too late to start saving or to save more. If HLN's Clark Howard had to tell you one thing about saving for retirement, he would tell you to make sure that’s your first priority. There are always scholarships and loans available to pay for your kids’ college tuition, but there are no scholarships available for you in retirement, and unfortunately, many Americans are finding that out the hard way. The money won’t magically appear when you reach age 65, so start planning now!
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