According to reports, almost half of the baby boomer generation has no savings for old age.
If you’re a white-collar worker living in a company with near-universal retirement coverage and a culture that encourages you to save $500,000 or more before retiring, you may be surprised by that fact.
However, many Americans are self-employed, employed by a minor business that doesn’t contribute to a retirement fund, or live paycheck to paycheck.
According to Craig Martin, J.D. Power’s managing director of wealth and lending intelligence said that one would think everybody is employed by a Fortune 500 company and has a pension plan, but that’s not the case.
According to the 2020 Census, less than half of employed Americans have set up any money for retirement. Rates of savings increase yet eventually will reach a cap.
Among those in the boomer age range of 55 to 64, 58% of Americans have a retirement savings account.
Most older adults who haven’t saved for retirement rely on Social Security. Social Security payments to retirees average around $1,800 per month. Over $4,000 a month is spent by the typical American home headed by someone 65 or older.
In the past, retirees could rely on a stable income from sources like employer-based pensions and Social Security.
The value of pensions and Social Security as a source of retirement income is falling. In order to have a base retirement in the United States, saving money is more important than ever.
According to a report, having a higher degree opens you to more retirement plan options. While 50% of employees with some college and 32% of workers with a bachelor’s degree or above have access to an employer-provided retirement plan, 76% of those with less than a high school diploma do not.
Differences by ethnic group and race are also evident in the statistics. Sixty-four percent of Hispanic employees, 53 percent of Black workers, and 45 percent of Asian workers do not have access to a retirement plan offered by their employers. About 26 million of the workforce consist of these workers.