There is enough talk about the retirement crisis in the U.S. Today Americans are aware that they might not have sufficient funds for their retirement years, yet they fail to save.
According to estimates, an average retiree would need approximately $1 million in order to enjoy a $5,000 income each month for thirty years. But most 50-year olds in the country have only about $43,000 tucked away for retirement. In addition to this, 45% of the U.S. citizens have absolutely no money in their retirement savings. It doesn’t come as a surprise then that 80% of the citizens in American (30 to 54 year age bracket) will fail to have sufficient money to sail through their retirement years.
Disappearance of pension
As far as retirement safety is concerned, workers have been dependent on large pension plans for several years now. These benefit plans did not require too much direct supervision by the beneficiary. Under these plans, if a worker made a commitment to the firm for a fixed time period, typically 30 years, they could expect consistent payments to help them get through the retirement years.
The bad news is that these pension plans will now be removed and replaced by something known as “defined contribution” like the 401(k) plans. These new plans call for a lot more a diligent planning in order to accomplish retirement goals.
The purpose of social security isn’t to serve as the primary income source for retirees. Rather, it is meant to add to the cash flow coming in from other retirement income sources. But several people are now reported to be absolutely dependent on social security for income support. Nearly 36% of the citizens in the United States over the age of 65 years depend only on their Social Security to get aid. The bad news is that there is almost no money left in Social Security and it would only probably provide for 77% of the benefits by the year 2034.
Rising healthcare costs
Among the biggest expenses that retirees could anticipate is meeting their healthcare and medical requirements. These expenses are quick to add up and have the power to demolish retirement accounts. Also, there is a prediction that healthcare expenditure will increase by approximately 6% annually and Medicare just provides 62% coverage for the medical expenses of an average American.