Retirement Is Disappearing From The Future Of America’s Middle Class
In the past retirement was a reality for the majority of Americans. Through working hard, saving, and the myriad of available retirement saving options including pensions and a sizeable employer matched 401(k) plan, retirement was not only feasible, it was expected. Due to difficulties with the stock market, frozen wages, and compounding bills, many middle class Americans have thrown their hands up and all but given up on the idea of a long-term retirement plan.
Middle Class Workers Plan On Working Into Their 80s Or Beyond
According to a recent study done by Wells Fargo, done on workers between the ages of 25 and 75 with household incomes between $25,000-$100,00; 34% indicate that their idea of a retirement plan was to work until at least the age of 80. A greater percentage yet, 37% indicate that they will never retire, and that they plan on working until they get too sick to hold a job or until they die. The reason behind this slowly shifting trend is that most feel they are unable to pay their bills and meet their monthly expenses while still saving for retirement. That, and with the average social security benefit being around $15,000/year, it’s not “doable” to simply live on Social Security during retirement.
The struggle to pay for bills and other obligations is mounting, while retirement dreams are disappearing. According to Laurie Nordquist, who is with Wells Fargo Institutional Retirement and trust: “For the past three years, the struggle to pay bills is a growing concern and the prospect of saving for retirement looks dim, particularly for those in their prime saving years.” One of the most compelling factors is the fact that median annual household incomes are down about 8% since 2007. That’s pretty rough when you also factor in how much inflation is eroding the average income. It can be difficult to know where to shave your budget in order to save for retirement, when you’re barely scraping by and able to pay the bills.
Middle Class Workers Fear Stock Market Investing For Retirement
Another aspect to this quandary is that many middle class workers are fearful of investing what they are able to save into the stock market. After losing such a significant portion of their savings back in 2008 when the market crashed, many are fearful of once again taking their hard earned savings and placing it back in the throes of the volatility of the stock market. Interestingly enough, statistically, the stock market still is the only vehicle that is proven over time to generate a decent return on investment.
Sadly, planning on working forever is not always a feasible option for many retirees; when you reach a certain age, for many individuals significant health problems arise and other difficulties stand in the way of a holding a full-time job. Unfortunately, one can never predict the direction your health will go and whether or not you will physically be able to keep working through retirement. Instead, working now to pay off debt and actually set up a savings goal is a retirement plan with a much greater likelihood of success. Having a retirement plan “B” for the “what if” scenario of a significant health problem or other issue standing in the way of work, is always the safest bet. For more information on how to get on your feet financially and create a feasible retirement plan no matter how old you are, speak to a Redhawk Wealth Advisor near you today.