A new study released by the Employee Benefit Research Institute (EBRI) revealed that many workers will need to work into their 70s or even 80s before having enough money for retirement. According to the study, both Gen Xers and Baby Boomers should prepare themselves for a long work life if they want to cover their basic retirement expenses and health care costs.
The Risk of Running Short of Money High for Earlier Retirees
The study found that most workers who plan on retiring the age of 65 have a high risk of running short of money in the middle of their retirement. In fact, it was found that even a worker who delays retirement until their 80s will be “at risk” of running short of money.
Income levels helped determine the likelihood of having money in retirement:
- Bottom 25-percent income group: Among workers in the lowest income group, only 29.6 percent are expected to have sufficient resources to avoid running out of money in retirement 50 percent of the time.
- Top 25-percent income group: The study found that nearly 75 percent of households are likely to have adequate income of they retired at age.
In both scenarios, the probability of having sufficient money improves when retirement is deferred–the longer the deferment, the better.
Participating in 401(k) a Major Factor
According to the EBRI, a major factor in whether workers would have enough in retirement was whether they participate in a 401(k) plan or similar.
Those who participate in a defined contribution retirement plan are able to take advantage of employer matches that help boost the amount of savings they’re able to retire with. This helps to shorten the number of years past 65 that workers would need to defer retirement.
However, as mentioned previously, those with lower incomes still have a greatly likelihood of running out of money than those in higher-income brackets, even when participating in a retirement plan.
If you feel your retirement security is in question, learn how to save for retirement sooner than later to avoid a financial shortfall when you need money the most.
You’re title should be,”Employees will have to work until they die. Retirement is a thing of the past.”
Of course financial experts (who are manipulating the numbers) want to say work, work, work until you drop dead because you won’t be able to afford anything. Straightening out the situation starts with limiting frivolous lawsuits (and thereby limiting lawyers fees), putting a cap on the rediculous inflated charges hospitals are billing to Medicare and Medicaid, and directly to patient’s, and stopping the rediculous technology wars where new phones and other tech are now dropping every month as the new latest and greatest things (because subsidies for the prices of this 600 phones/tablets are being provided to the companies selling them).401K relies on investing in the stockmarket and having little to no control over where your money is being used by the company you work for. How short are people’s memories that they don’t remember how devalued anyone’s stock portfolio was just as little as 18 months ago with the housing fiasco? There were plenty of p eople who thought they could retire based on misinforamation and outright lies. Not enough people went to jail for the crimes of stealing people’s retirement funds in my opinion.
America sucks
What happened to the future where machines did our work and freed us up for more leisure time?
Show this to Volt in Pasadena, California, since they asked me how old I am, and “Do you need to work?!” I am barely making it, having taken early retirement(I was an executive secretary and can still type 70 wpm)in the 90′s, partially due to stress. I worked another five years, for temp agencies, after taking some time off. I then took a job as an Administrative Assistant, at a nearby tech college, and worked another five years. I’ve done retail since November 27, 2004. Now our store is closing due to the ailing economy. I do receive a couple of small pensions, plus Social Security. I am 72 years of age. There’s no real given age to stop working when your pensions and S.S. aren’t enough. The alternative is to move out of the expensive city in which I live.
if we could ever get a grip on spending,spending on the usless stuff we think will fill our lives,that is just making us empty,we have lost it as a society that knows what is practical,we need another wake up call,we didn’t understand the last one!
Get real….in this youth obsessed culture do you really think anyone is going to hire someone 70-80 years old? As it is now, companies hire young people to pay them less, take advantage of their greeness, and they have some added silly idea that they bring fresh ideas …when all they really do is reinvent the wheel. it will be a real train wreck for the older folks.