[ad_1]
The Social Security Administration plans to increase retirement payments next year to offset rising inflation. Lydia Hu of FOX Business with more.
The vast majority of older American workers are unprepared for retirement and they know it, but many still have high expectations about how their golden years will be spent, according to a new study.
The Institute for Insured Retirement (IRI) conducted a survey earlier this year of nearly 1,000 part-time and full-time employees aged 40 to 73, and found that 51% of them had less than $ 50,000 in retirement savings, and 56% of respondents admit that they don’t believe they will be financially ready to support themselves for the rest of their lives after they stop working. Despite this, a third believe they will retire before age 65.
The vast majority of older American workers are unprepared for retirement and they know it, but many still have high expectations about how their golden years will be spent, according to a new study.
3 RETIREMENT SURPRISES TO START
The IRI also found that 58% of older workers think they will need to earn $ 55,000 or more per year in retirement, and 38% expect incomes of $ 75,000 or more. But the vast majority are not on track to get there.
While about three-quarters of older workers are currently saving, about a quarter have less than $ 250,000 in their pockets and only one in five have saved more than $ 500,000. In the oldest cohorts studied, a third of workers aged 62 to 66 have no retirement savings and about 20% of workers aged 63 to 73 have nothing.
Regardless, 70% of workers believe they will have enough money to not only cover basic expenses but also to enjoy at least some travel or leisure activities during retirement, which the IRI called it the problem of “champagne budgets” and “an additional disconnect between savings and reality.”
The IRI analysis hypothesized that one of the reasons for the disparity between the savings progress of older workers and their expectations of how it might turn out might be because people don’t do the math. Only four in ten workers have even tried to figure out how much they’ll need to fund their retirement, the data shows.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
More than 60% of those polled believe that if they deplete their savings in retirement, they will be able to downsize and live their days on social security income alone, but IRI warns that this will not be probably not the case for the majority of people who are relying on such income over the long term.
“Many workers with savings believe they will not need to use their savings to cover basic expenses, perhaps believing that social security benefits alone will be sufficient,” the report said. “It is highly unlikely that more than half of workers will be able to manage social security, especially if they retire before full retirement age, as so many others plan to do.”
[ad_2]
Source link