US workers are approaching a retirement crisis, even as the economy and stock markets are seemingly improved: New data shows that 57 percent of US workers and retirees report less than $25,000 in total household savings and investments, excluding their homes.
That data is the result of a survey conducted by the Employee Benefit Research Institute (EBRI), and it’s jarring because, in 2008, only 49 percent of workers reported having this little money saved.
Today, the situation has reached crisis levels: In fact, only half of the 1,003 workers and 251 retirees surveyed said they could come up with $2,000 for an unexpected need in the next month.
The outlook is no better. The percentage of workers who have saved for retirement plunged from 75 percent in 2009 to 66 percent in 2012. According to the survey, 28 percent of workers are not confident they will have enough money to retire comfortably – the highest level in the study’s 23-year history.
One problem is we’re living longer. For example, a man who reaches age 65 in 2013 is expected to live an additional 20.5 years, up from 19.5 in earlier projections. Our extended lifespans will force us to stretch our retirement savings.
We’re not relying on pension plans either; fewer and fewer Americans are covered by traditional pension plans. According to US Department of Labor data compiled by the EBRI, pension plan participation declined dramatically from 28 percent in 1979 to 3 percent in 2011.
If you think you need to reevaluate your own retirement savings, your advisor can help.