Retirement Insecurity Across America. Is This a Sign of the Times?
Relating with the 90% Personally?
The Dow Jones industrial average has been hitting record highs lately, causing many analysts to declare the recession over, according to About.com. However, millions of people in America are still struggling despite small indications of recovery. Many Americans are extremely concerned with their ability to enjoy retiring through their savings plans. New research shows that a shocking number of workers are simply not confident in their ability to retire when they reach the expected age. The statistics recorded by the Employment Benefit Research Institute paints a much different picture of the economy than the stock market.
Caution: Savings On Shaky Ground
The research of the institute discovered a lot of uncertainty among workers attempting to save up for retirement. Reportedly, only 13% of the participants are fully confident in their ability eventually to retire. A much larger chunk, 28%, said they are not confident in their ability to retire on time or in comfort, says MoneyNews. (www.moneynews.com/MKTNews/Americans-Retirement-Funds/2013/03/27/id/496544/?promo_code=12F38-1&utm_source=taboola) this statistic alone has risen by a factor of three in the last three years.
The recession has been rolling on for four years now causing consumer retirement confidence to fall in that time-period.
Concerned Over Low Savings?
While not all are thoroughly convinced that they are behind on their savings goals, many are on the fence and still are not free from concern. Over 20% of consumers had doubts in their ability to save for retirement effectively. While these individuals are not confident in their own future, 40% say they are partially confident. An astonishing 87% of the respondents fall into the category of ‘concerned’ and reported some level of uncertainty or worry about retirement. This is a shocking change from the disappointingly low uncertainty ratings recorded from the workforce at the beginning of the 1990s.
What is Causing This Massive Loss of Confidence?
There are numerous factors behind the loss of confidence in the American dream of retirement. Workers are simply having a harder time making ends meet altogether. MoneyNews reports that a majority of the respondents noted higher living costs as a key stumbling block between them and retirement. (www.moneynews.com/MKTNews/Americans-Retirement-Funds/2013/03/27/id/496544/?promo_code=12F38-1&utm_source=taboola) Increases in healthcare costs and ongoing care due to injury and illness are also sapping the reserves of many consumers. Inflation has only further compounded all of this for the average worker.
The impact of falling capital gains cannot be ignored either. While riskier investments may be paying off for anyone who was brave enough to stay in the stock market, more conservative options are producing extremely low yields. Money market accounts and bonds are paying just 15% of what they produced less than a decade ago. Finally, payroll tax increases re-instituted are further lowering what the average American takes home from work, sapping their ability to save for later.
Break Out From the Crowd – Trying Something New
Those that feel they have waited too long to save for retirement, can boost their chance for success, by trying something new. Opening a self-directed IRA retirement account or combining old 401(k)s that one might have forgotten could help get a savings plan on the right track. Even if, an individual only has a decade remaining until hitting the retirement age, they can start now to make your golden years as comfortable as possible.