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159

Retirement crisis looms as Americans struggle to save (www.cnn.com)

submitted 2 years ago by MicroWave@lemmy.world to c/news@lemmy.world

31 comments fedilink hide all child comments

The number of US workers in the labor market over the age of 75 is expected to nearly double over the next decade, creating a looming retirement crisis.

Retirement savings in the United States were long thought of as a three-legged stool. Americans had pension plans, Social Security benefits, and defined contribution plans like the 401(k). Not anymore.

Pension plans are nearly extinct. About half of private sector workers were covered by those so-called defined-benefit plans in the mid-1980s, but by 2022 only 15% of private sector workers had them.

Social Security payments still provide about 90% of income for more than a quarter of older adults, according to Social Security Agency surveys. But the Social Security trust fund is facing a 75-year deficit, and without intervention it will be depleted by the mid-2030s, meaning that only a portion of retirees’ expected benefits will be paid out. Lawmakers have faced a decades-long political stalemate on how to fix it.

What’s left is the 401(k), which 68% of private industry workers have access to, but only 50% use.

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[–] ShepherdPie@midwest.social 2 points 2 years ago (1 children)

People don't understand finances here judging by the vote tallies.

Yes the stock market is bullshit but you're still earning more money there than you would anywhere else. You're not going to be retiring off of cash under your mattress or with it earning 0.05% in your Bank of America savings account. With those options, your money is worth less and less each year due to inflation. It's the same reason why you used to be able to buy a house for $5,000 but instead you're expecting that $5,000 to be enough to retire with in 30-50 years.

[–] partial_accumen@lemmy.world 1 points 2 years ago

People don’t understand finances here judging by the vote tallies.

Yes the stock market is bullshit but you’re still earning more money there than you would anywhere else. You’re not going to be retiring off of cash under your mattress or with it earning 0.05% in your Bank of America savings account.

I'm keeping an open mind. Perhaps the poster holding that view of "no stock market" can indeed live on mattress or 5% HYSA interest. Maybe they are planning on retiring in another country with far lower cost of living, and the risk of exposure to equities isn't worth it to them. For retiring in the USA however, I don't know of other ways to grow your saving enough to beat inflation to retire on at a lifestyle resembling that of the working years earning the principcal.