Financial and political experts have discussed a retirement crisis for a long time now. The talk is now all set to become a reality. The main cause of this doomsday scenario, is the older demographic scenario. According to a study by Teresa Ghilarducci of New School for Social Research, about 33 percent of the present workers aged between 55 and 64 years, will in all probability be poor, or close to poor, in retirement. This is based on the current levels of their retirement savings, and also of their total assets. The study also revealed that 55 percent of the retirees will be compelled to depend exclusively on the income they get from Social Security.
Hitting the middle class
Ghilarducci, an acknowledged expert on economic policy analysis, said that people are yet to catch up from the effects of The Great Recession, explaining that a number of individuals continue to consider both the spousal and housing income, as a component of their retirement income. She has also noted that the middle class, that lost a considerable amount during the recession, and subsequently will be dependent on Social Security during their retirement period, will have less income replaced than others. In short, Ghilarducci said, the middle class was dealt a very hard hand. One of the many issues rolling this problem, is demographics. The aging of the population will contribute to the number of people at poverty or near poverty level.
Ghilarducci affirms that all programs which assist the elderly will come under pressure. This includes a wide swathe of services like Medicaid accepting nursing homes or the housing programs catering to the elderly. She stressed that the liability concerned with dealing with the elderly will only grow.
The problem is further amplified by the report showing that almost 50 percent of Americans, who had previously worked in 2011, were not provided work related retirement accounts. The report also shows that approximately 68 percent of the Americans, working age between 25 and 64 years, were not participants in the retirement plans sponsored by their employers. This is due to the employer either not providing one, or they took the decision to not participate. She believes that one of many problems that faces employers, are their abilities to encourage retirement before it is due. Plans for retirement were conceptualized for attracting and retaining employees. These assists in easing out of the older employees and permitting newer ones to enter into the company.