1. Only 25% of Americans are on track to maintain their lifestyles in retirement.
, the rest will need to work longer, move to lower-cost housing and reduce many other expenditures to maintain their standard of living, largely due to the coronavirus downturn. He also found that 80% of Americans didn’t know how much money they need for retirement, which he called “irresponsible.”
2.The Social Security trust funds would be empty by 2023 without the payroll tax.
That’s according to Social Security Actuary Stephen Goss. On Aug. 8, an executive order from President Donald Trump allowed employers to temporarily defer the employee portion of payroll taxes. Trump has said the deferred taxes could later be forgiven, or the cut made permanent. When he signed the order, he vowed to “terminate the tax” if reelected. Republican lawmakers later released a plan to fund any shortfalls from the Treasury.
3.Social Security benefits will be cut 21% if the trust fund runs out.
WIthout intervention from Congress, this could happen
a dozen years from now
, if not sooner.
4.Clients born in 1960 will have a big problem.
Due to the complicated formula the Social Security Administration uses to calculate benefits, pre-retirees born in 1960
will see a nearly 15%
cut to their lifetime benefits from Social Security when it’s time to collect. If the COVID-19 pandemic suppresses the economy into 2022, those same cuts will affect even greater numbers of pre-retirees. What’s more, the impact to their Social Security benefits will be permanent.
5.The 2021 1.3% Social Security COLA will be a mere 1.3%.
Retirees who rely on Social Security benefits received good news and bad news in October: The cost-of-living adjustment for 2021 would be 1.3%. Better than 0%, which had been originally discussed. The bad news: Rising health care costs and a potential
6% increase in Medicare Part B
premiums would eat away at that benefit increase.
6.More than half of Americans think the economy is worse now than in 2008.
A majority, or 51%, of Americans see the COVID slowdown as worse than the 2008 recession, according to a
from Edelman Financial Engines. It also found that 26% had withdrawn money from retirement or savings for living expenses.
7.Sixty percent of retirement savers have fallen behind.
A study by TIAA found that
60% of retirement plan participants
had fallen behind on savings, and among these, 30% said it was directly due to the coronavirus pandemic.
8.Searches for “move out of the U.S.” have increased 16-fold.
International Living stated
it had seen a 1,600% increase in search traffic around the phrase “move out of the U.S.” since May. Further 20% of respondents in a survey it conducted said they wanted to move due to the pandemic. However, 45% cited a desire to save money.
9.Forty-two percent of investors sold stock; 88% of them regretted it.
In reaction to the plunge in stocks in mid-March, 42% of investors in a survey by
sold at least one stock while 24% sold all their holdings. Sixty-nine percent of those who sold stock at the beginning of the pandemic greatly regretted it while 19% said they were somewhat regretful.
10.Eighty percent of older Americans don’t understand retirement planning.
Four in five Americans age 50 to 75 fail to understand the basics of how to successfully plan for a financially secure retirement, according to a study released by
The American College of Financial Services
. The survey also found only three in 10 respondents had a plan in place to fund long-term care needs, while only one in four actually had long-term care insurance.
11. Nearly 3 million workers may have been forced into early retirement due to the pandemic.
From March to August, 2.8 million older workers might have been pushed out of their jobs prematurely, with economic turmoil and poor health making it difficult to for them to resume their careers elsewhere, according to by
the Schwartz Center for Economic Policy Analysis at the New School
. Its report, released in early September, found that 38% of unemployed older adults stopped looking for work and exited the workforce, and an additional 1.1 million were expected to do the same.
The specter of COVID-19 can put a scare into anyone, but the fear is even greater for those in or near retirement.
Not only are eight in 10 people who die of the virus over 65, the pandemic is rattling health care, Social Security, Medicare, personal savings and government spending. And that’s on top of the lack of preparation, savings difficulty and general uncertainty that American retirees were already facing.
There are many things that can go bump in the night and frighten current and future retirees, but the statistics in the gallery above might be the scariest of them all.
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