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Retirement used to be synonymous with leisure and travel. Americans believed that decades of hard work and thriftiness would make for a prosperous and successful life they could enjoy after their jobs – the "American Dream."
Now retirement doesn't evoke the same sense of tranquility for most U.S. workers. Instead, economic anxiety has taken its toll.
Americans used to ride a "three-lane highway" into retirement: a traditional pension, Social Security, and individual savings plans, like 401(k)s.
But the recent economic downturn packed a devastating punch to many 401(k) accounts, U.S. households have dipped into savings to make ends meet, and debt-laden federal, state and local governments will have trouble meeting pension and Social Security obligations.
As the first of the 78 million Baby Boomers start to retire, most of them worry they don't have enough retirement savings to support them in their post-work years.
A nationwide public opinion research study released Monday by the National Institute of Retirement Security found that 54% of those polled are very concerned about the effect of economic conditions on their ability to have a secure retirement. About 78% felt the average worker was unable to save enough on his or her own to guarantee retirement, and 73% said stock market volatility made predicting retirement savings difficult.
Only 11% of respondents expected to be able to spend retirement money on travel or leisure activities, a testament to how low U.S. retirement expectations have fallen. The rest hoped to live comfortably, pay their bills and afford increasing healthcare costs.
Seeing the U.S. government continually clenched in political gridlock isn't helping calm the nerves of future retirees.
Those surveyed felt Washington wasn't in tune with Americans' retirement concerns. They said lawmakers spent too much time arguing over issues to actually quell retirement fears. More than 80% of people surveyed said the flaws in America's retirement system have been exposed and are in dire need of repair.
One solution some economists advocate is raising the retirement age to generate more tax revenue and reduce the costs of pensions and Social Security benefits.
A recent study by the research group American Enterprise Institute showed that the Social Security system would be in better financial health if the eligibility age for early benefits was raised to 65 from 62.
Raising the retirement age "could encourage Americans to remain in the workforce longer, significantly increasing their retirement income, boosting economic output, and increasing tax revenues," wrote Andrew G. Biggs, the study's author.
But others argue that an age change isn't realistic since a weak state of U.S. employment has left many workers over 55 without jobs. The unemployment rate among that age group is at its highest level in more than 60 years, leading many to file for early Social Security benefits.
This brings us to next week's Money Morning "Question of the Week": Are you worried about your retirement savings? Are you concerned that the money you have won't be enough to support you? Have you been burned by the market when it comes to your retirement? Have you found a retirement saving strategy that works?
Send your answers to email@example.com. We want to hear from you!
We reserve the right to edit responses for length, grammar and clarity.
Thanks to everyone who took the time to participate – via e-mail or by posting their comments directly on the Money Morning Web site.]
News and Related Story Links:
Stock Market Volatility Makes Retirement Planning ‘Impossible': Study
- National Institute on Retirement Security:
Pensions and Retirement Security 2011: A Roadmap for Policy Makers
Raising The Retirement Age: Can It Balance Budgets?
- Money Morning News Archive:
Question of the Week Feature