A quarter of middle-class Americans are now so pessimistic about their savings that they are planning to delay retirement until they are at least 80 years old -- two years longer than the average person is even expected to live.Job Insecurity, Debt Weigh on Retirement Confidence, Savings
It sounds depressing, but for many it's a necessity. On average, Americans have only saved a mere 7% of the retirement nest egg they were hoping to build, according to Wells Fargo's latest retirement survey that polled 1,500 middle-class Americans.
While respondents (whose ages ranged from 20 to 80) had median savings of only $25,000, their median retirement savings goal was $350,000. And 30% of people in their 60s -- right around the traditional retirement age of 65 -- that were surveyed had saved less than $25,000 for retirement.
As a result, many people aren't in a hurry to quit their day jobs.
Three-fourths of middle-class Americans expect to work throughout retirement. And this includes the 25% of Americans who say they will "need to work until at least age 80" before being able to retire comfortably.
The Employee Benefit Research Institute (EBRI) reports Job Insecurity, Debt Weigh on Retirement Confidence, Savings
Executive Summary Points
- Americans’ confidence in their ability to retire comfortably is stagnant at historically low levels. Just 14 percent are very confident they will have enough money to live comfortably in retirement (statistically equivalent to the low of 13 percent measured in 2011 and 2009).
- Employment insecurity looms large: Forty-two percent identify job uncertainty as the most pressing financial issue facing most Americans today.
- Worker confidence about having enough money to pay for medical expenses and long-term care expenses in retirement remains well below their confidence levels for paying basic expenses.
- Many workers report they have virtually no savings and investments. In total, 60 percent of workers report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.
- Retirees report they are significantly more reliant on Social Security as a major source of their retirement income than current workers expect to be.
- Although 56 percent of workers expect to receive benefits from a defined benefit plan in retirement, only 33 percent report that they and/or their spouse currently have such a benefit with a current or previous employer.
- More than half of workers (56 percent) report they and/or their spouse have not tried to calculate how much money they will need to have saved by the time they retire so that they can live comfortably in retirement.
What About the Expected Retirement of Nuclear Power Plants?
I picked up links to the above articles in a surprising place. Dawn Stover, writing for the Bulletin of the Atomic Scientists compared the retirement of workers to the "The new retirement" for nuclear power plants
Today, only 14 percent of Americans age 25 and older are confident that they will have enough money to retire comfortably, according to a recent survey by the Employee Benefit Research Institute (EBRI). Another recent survey, by Wells Fargo, reported that a quarter of middle-class Americans now plan to postpone retirement until they are at least 80 years old -- longer than many of them are expected to live. For Americans facing an uncertain financial future, 80 is the new 65.Crazy to Plan Retirement Past Life Expectancy?
Some are calling it "the new retirement." But it really should be called "the no retirement."
And senior citizens aren't alone. Nuclear reactors are experiencing some of the same woes: Retirement age is fast approaching or already in the rearview mirror, but there is a lot less money in the nest egg than anticipated.
At the 44 US nuclear reactors that have already received license extensions, 60 is the new 40. And even when those reactors reach the end of their working lives, they may not be able to move on to the final stage. According to a recent article in The New York Times, the operators of 20 US nuclear reactors -- including some with licenses that expire soon -- do not have sufficient funding for prompt dismantling. If these reactors can't keep working, their owners "intend to let them sit like industrial relics for 20 to 60 years or even longer while interest accrues in the reactors' retirement accounts."
Is it crazy for someone to delay his retirement past the age he can expect to live? Sure, but that's essentially what the nuclear industry plans to do with many of its reactors. And it should not come as a surprise that the NRC has no problem with this plan. After all, we're talking about a regulatory agency that issues 40-year licenses for a process that creates a radioactive waste problem lasting tens of thousands of years.
Dawn says "Is it crazy for someone to delay his retirement past the age he can expect to live". Sorry Dawn, that's not crazy at all. If you have insufficient money, you need to work. Some want to work because they like what they are doing.
If you are seeking crazy, try these:
- What is crazy is to expect social security to take care of all your retirement needs.
- It's also crazy to expect to receive defined benefits even if you are not in a defined benefit plan.
- Finally, it's crazy for public unions to think they are going to get all of their promised benefits when it will bankrupt cities and states to do so.
Economic Craziness
If you are looking for more craziness, Dawn wants a "carbon tax to lift job prospects".
Here is another crazy idea: Dawn talks of "forcing people to save more and protect retirement savings from the vagaries of the financial markets".
Yikes!
Nuclear Craziness
One point I happen to agree with Dawn on. It's crazy to issue "40-year licenses for a process that creates a radioactive waste problem lasting tens of thousands of years" and have no plans for anything but the first 40 years.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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