How do retirees and retirees see the future
When thinking about retirement, it’s all about finances. After all, there is a certain lifestyle that people are accustomed to. A lot of emotional and financial planning goes into retirement.
Most of the baby boomers are already there. So, how’s retirement going for them? What about the Generation X group? They are planning to retire. How are they financially and what should they do?
How has retirement traditionally been funded?
Many financial advisors previously recommended a three-legged stool approach when planning retirement: Social Security, pensions, and personal savings. Pensions have since been replaced by 401(k) plans and Individual Retirement Accounts (IRAs).
But the basic theory about how retirement is funded still remains. The only question mark on many retirees’ minds is Social Security. Will Social Security be there in the next 10 years when these retirees need it? Will the traditional three-legged stool hold up?
Who depends on Social Security?
In 2022, more than 47 million Americans will receive Social Security retirement benefits. This amounts to $80 billion in interest. It is an important source of income for many retired Americans. But for many, it is not the only source of income.
For 37 percent of retired men and 42 percent of retired women, more than half of their income comes from Social Security. The rest comes from retirement funds, savings, or work.
But even though they have other sources, Social Security is a big part of their livelihood.
Others are more dependent on Social Security. For example, 12 percent of men and 15 percent of women rely on Social Security for 90 percent or more of their income.
Today’s retirees and retirees face challenges in terms of financial security. But who are these retirees and what are they doing to prepare?
Generation X – before retirement today
This group, who was born between 1965 and 1985, is in their forties and fifties, and is considering retirement. This is a flexible generation. They were sledge boys and survived MTV. They are also parents and surviving children.
Generation X is often referred to as the “sandwich generation,” because they fall between baby boomers and millennials. As a result, Gen X often finds themselves caring for both parents and elderly children.
With high debt and ongoing expenses, retirement planning is a cause for concern for many GMs. 59 percent of Generation X were worried they wouldn’t be able to have a financially secure retirement, according to a survey by the National Institute for Retirement Security.
Generation X is a financially savvy group, according to a survey by Investopedia. Nearly 80 percent of these retirees have an intermediate or advanced understanding of finance. They expect Social Security and a 401(k) to be their primary sources of retirement income.
But with adult children returning home, parents moving in, inflation rising, and the stock market fluctuating, these retirees look more pessimistic than current retirees.
Most of the retired baby boomers are born comfortable
The baby boomer generation, who were born between 1946 and 1964, have dominated the workforce for decades. But as they get older, they are now in control of retirement. Many baby boomers are enjoying retirement for several years.
Current retirees are optimistic. While 64 percent of retirees are concerned about stock market volatility, only about 49 percent of current retirees are, according to a Kiplinger survey.
About 70 percent in the survey said they expect to live comfortably on their income. Sixty-six percent said they would never run out of money.
But in the same survey, less than 55 percent of pre-retirees thought they would never run out of money.
Part of the discrepancy may come down to planning, but retirement age is a factor, too.
retirement age factor
The retirement age is rising. Americans are staying in the workforce longer. In 1992, for example, the average retirement age for men was 62; In 2021, she was 65 years old. The retirement age for women has also increased. The median age for women was 59 in 1992, but increased to 62 in 2021. This trend was interrupted by COVID-19 a bit in 2021. Workers took the opportunity to retire a little early to avoid shutdown.
Despite the disruption of COVID-19, Americans are working longer — in part due to financial concerns.
The average monthly Social Security retirement check is $1,672.76. This doesn’t go very far when you consider that the average monthly mortgage in the US is $1,100. So there is not much left for living expenses, let alone any details in life.
Americans work longer to keep paying in 401(k) plans and make more money in savings. Many start collecting benefits, but continue to work. They must complete their Social Security benefits.
Social Security and Medicare Sustainability
One thing retirees and retirees have in common is their concern about the viability of Social Security and Medicare.
In a Kiplinger survey, 79 percent of retirees were concerned about the financial strength of Social Security, while 69 percent of retirees were concerned.
Medicare hasn’t fared much better, with 68 percent of retirees questioning its financial strength and 62 percent of retirees skeptical.
Financial plan for retirees and retirees
Social Security is only one leg in the stool. Those who are optimistic about retirement have 401(k) plans and savings. But sometimes this plan is not put together, which leads to people working longer.
The Epoch Times Copyright © 2022 The opinions and opinions expressed are those of the authors. It is intended for general informational purposes only and should not be construed or construed as a recommendation or solicitation. Epoch Times does not provide investment, tax, legal, financial, estate, or other personal financial advice. Epoch Times assumes no responsibility for the accuracy or timeliness of the information provided.