Out of Pocket: Many Older Workers Fear They Won’t Have Enough to Retire
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Nearly Two-Thirds of Older Workers Fear Inadequate Retirement Funds
Nearly two-thirds of older workers fear their Social Security benefits and 401(k) savings will end up being inadequate to support their retirement.
Retirement Preparation among Gen X Workers Lacking
That’s according to a recent New York Life survey on retirement readiness, which also found that Gen X workers — the oldest of whom will turn 60 next year — are particularly likely to say they’re not financially prepared for retirement.
Mixed Confidence among Pre-Retirees and Retirement Savings Goals
Only 18% of Gen Xers say they’ve already “successfully retired.” And more concerningly, 70% of those in Gen X who are still working (or “pre-retirees”) expect to either retire later than expected or not at all, according to the survey, which attributes the pessimism to worsening financial confidence and the gradual increase in longevity.
The Threat of Unaffordable Healthcare Expenses in Retirement
“The potential for people to live longer has implications for the workplace, retirement, and health planning,” Jessica Ruggles, corporate vice president of financial wellness at New York Life, said in a report, adding “the typical retirement preparation often happens too late.”
Savings Efforts Stunted Despite Attempts
The lack of confidence about being able to afford retirement isn’t for lack of trying: Americans are trying to save money but are struggling to put enough away.
Gaps in 401(k) Balances and Future Expenses
A separate report from Fidelity last month showed that the average 401(k) balance among Gen X plan participants is about $182,100, while the overall average balance is $127,100. While these figures represent meaningful savings, they pale in comparison with how much money Americans expect to need for a comfortable retirement.
Achieving a Comfortable Retirement on Social Security Benefits Alone is Challenging
Only 37% of those within 5-10 years of their desired retirement age say they have started saving for retirement, leaving many relying on Social Security benefits alone.
Catching Up on Retirement Savings Later in Life
If you’re an older worker and lack adequate retirement savings, now is the time to get serious about the issue. Saving for retirement at a young age is typically much easier because your investments have time to grow and compound over decades — a luxury you don’t have if you’re near retirement.
A Key to Success Lies in Financial Planning
Two-thirds of those who were able to retire successfully attributed their success to having a financial strategy in place. Figuring out how much you’ll need in retirement and adjusting your budget are essential steps.
