Many people are saving for retirement, but their retirement savings may not be enough to cover their entire retirement life.
According to a report by CBS News, with the increase in life expectancy, about half of middle-income Americans currently employed say they will work past the age of 65 due to economic pressure or to maintain vitality. While some people say they enjoy working longer, 80% of them mention financial pressure, including inadequate savings and concerns that social security will not provide sufficient financial support.
Transamerica defines “middle class” as individuals with annual incomes ranging from $50,000 to $200,000, accounting for approximately 55% of American adults.
Catherine Collinson, CEO of the Transamerica Institute, stated that the average retirement account for middle-class families is $66,000, which falls far short of the $1.5 million estimated by Northwestern Mutual earlier this year for a comfortable retirement.
According to the latest data from Fidelity, the number of millionaires created through 401(k) plans has recently reached a new high due to the stock market’s rise. However, this figure only reflects about 500,000 accounts, a small portion of America’s 160 million workforce.
Renowned retirement expert Teresa Ghilarducci mentioned that only around 10% of Americans aged 62 to 70 can retire and remain financially stable.
Transamerica’s research found that approximately one in seven people do not participate in employer-sponsored retirement plans. About one-third of those below retirement age have prematurely withdrawn their retirement savings due to financial emergencies or to secure loans, a trend that Transamerica deems “worrisome.”
Despite these challenges, around 70% of individuals surveyed by Transamerica express confidence in being able to lead a comfortable retirement life and envision post-retirement activities such as traveling, volunteering, or caring for their grandchildren.