U.S. Census data show that there are more than 74 million Americans aged 55 and older. Every day, roughly 10,000 people in the U.S. reach retirement age, according to an article on NPR. But how prepared are these aging Americans for their golden years?
Turns out, Americans are not retirement-ready. In a new report from the Economic Policy Institute, The State of American Retirement, economist Monique Morrissey shows that retirement savings have reached a plateau and stagnated in the new millennium. Among the findings in the report:
- Retirement wealth hasn’t grown quickly enough to keep pace with an aging population.
- The shift from traditional pensions to individual savings has widened retirement gaps.
- Workers’ retirement prospects are increasingly affected by economic downturns.
- Family finances still haven’t recovered from the collapse of the housing bubble.
- The growth in retirement inequality hasn’t been random. The rich have gotten richer and the poor have gotten poorer.
- The gap in retirement readiness between workers with and without a college education has widened.
- Single people and women face particular challenges. Nearly two-thirds of married couples had retirement savings accounts in 2013, compared with 42 percent of single women and 43 percent of single men. Single women are more vulnerable in retirement than single men because of lower lifetime earnings and longer life spans.
- Most families have little or nothing saved for retirement, even those approaching retirement age, and nearly half have no retirement savings at all.
Cathy Weatherford, president and CEO of the Insured Retirement Institute (IRI), says in the State of the Insured Retirement Industry: 2015 and 2016 Outlook that the demographic case for lifetime income has never been more pronounced. “There’s a large cohort on the cusp of retirement. These Americans will live longer in retirement than any generation before, and will be more responsible for their financial security,” Weatherford says. “This is a tremendous opportunity for the retirement income industry.”