There are a lot of little things that people have to worry about as they age, like balding. About 28 million U.S. women are currently dealing with hair loss. But age is also accompanied by more serious concerns, like financial stability during retirement. A new study shows that half of middle-class Americans could now face poverty upon retirement.
73% of Americans expect to work past retirement age
The risk of more Americans sliding into poverty during retirement has been increased. This is according to a recent study from the Schwartz Center for Economic Policy Analysis at the New School (SCEPA). Contributing factors include depressed asset values, decreased earnings, and increased healthcare costs. While the average age of retirement is 63, about 74% of Americans are now planning to work past this age. This is to ensure they have financial stability.
40% of retirees will be near poverty at minimum
Study findings show that by age 65, 40% of middle-class Americans will be at least near poverty. (This is assuming they haven’t already fallen below the poverty line.) 8.5 million workers would fall below twice the Federal poverty level if workers 50 to 60 retire at age 62. A projection of 2.6 million people will have the worst retirement incomes at $11,700.
SCEPA said that two main concerns for people falling below poverty levels are lack of employment options and poor health. As older people generally require the most medical care, rising health care costs is an immense concern.
In 2010, healthcare expenses for people ages 65 and older amounted to about $18,500. Healthcare costs have continued to rise over the years, according to experts. U.S. Census Bureau data states there will be 83.7 million people age 65 and older by 2020.
Study co-author: Federal poverty level should be higher
Study co-author Teresa Ghilarducci states the $12,060 Federal poverty level for an individual should really be $24,120.
To avoid slipping into poverty after retirement, experts do recommend that people work as long as possible. However, retirement security has lost about $2.8 trillion due to the 2008 stock market crash.
SCEPA researchers and financial professionals recommend that there be an implementation of stronger protective measures. Things like stronger social security and guaranteed retirement accounts (GRA).
While it’s impossible to predict the future, you should keep this study and other data in mind. Moreover, plan as best as you can for retirement to ensure you’re financially stable.