Last year, Americans experienced a sharp decline in their confidence that they would have enough money to live comfortably in retirement—the largest drop since the global financial crisis. Recent research suggests that confidence has not recovered among either workers or retirees. However, some signs of optimism are emerging, particularly as wage growth begins to outpace inflation, as shown by the results of the Employee Benefit Research Institute (EBRI) and Greenwald Research.
The survey of more than 2,500 Americans highlighted several factors seen as potential obstacles to a secure retirement. Chief among these concerns are the rising cost of living, which makes saving more difficult, and the possibility of significant government changes to social security System.
Americans’ concerns about social security in retirement
Both Pensioner And today’s workers can expect to rely on three main sources of income in their golden years: Social Securitycompany pension schemes and private pension plans or investments. The study found that 88% of employees expect Social Security as a source of their retirement income, while an even higher percentage (91%) of current retirees say they already rely on these benefits, which may not bode well for their future economic security.
social security faces looming challenges as trust funds are expected to be depleted within the next decade. Without congressional action, this depletion could result in benefit cuts of at least 20%. In addition, Social security, Medicare The Part A hospital insurance trust fund is expected to be depleted even sooner, creating additional uncertainty for future retirees.
Changes to tax breaks for workplace-based retirement plans or individual retirement accounts (IRAs) are also potential risks that could disrupt retirement planning. Craig Copeland, EBRI’s director of retirement research, emphasized that such changes “can really change the dynamics of what happens in retirement and how people plan for their retirement.”
social security is consistently cited as a top concern in AARP polls, noted Nancy LeaMond, the group’s executive vice president and chief advocacy and engagement officer. During a press conference, LeaMond emphasized the importance of Social Security in the current political landscape. “Given that and the importance of Social Security, we’re asking every candidate for federal office this election cycle how they feel about Social Security,” she said.
AARP The results of a recently released survey show a rather bleak future for Americans ages 50 and older. 20% of respondents said they have no retirement savings and 61% expressed concern that they would not have enough money in retirement. AARP, which represents people ages 50 and older, is not only advocating for a strong stance on Social Security, but is also urging lawmakers to address issues related to family caregiving – a factor that disproportionately affects women’s economic security in retirement, LeaMond said.
In addition to advocating for the protection and expansion of social security, AARP also supports legislative efforts to improve retirement savings. One such proposal would include retirement accounts or automatic IRAavailable to Americans who do not have access to employer-sponsored retirement plans. This initiative is part of a broader effort to increase savings opportunities for all workers.
While Congress recently passed legislation to improve retirement savings, the impact of these changes is likely to be limited, especially for people nearing retirement age. Craig Copeland noted that while the legislation includes provisions that allow older savers to make additional contributions and introduce a subsidy for low-income earners, for example, these changes may not be enough to significantly change the retirement situation for people nearing retirement. “There hasn’t been much that has really changed the dynamics for people nearing retirement,” Copeland said.
