One key misconception to break is that Social Security is meant to be an adequate source of income on its own for retirees.
Tag: Social Security
Instead, pre-retirees are looking to add savings from 401(k) funds, IRAs, and even annuities.
This year’s Melbourne Mercer Global Pension Index suggests reducing pre-retirement leakage; requiring that part of the retirement benefit must be taken as an income stream; and increasing the funding level of the Social Security program are just some steps that can be taken to improve the U.S. retirement system.
Analyses from the AARP Public Policy Institute demonstrate the importance of Social Security to women and minorities, and of ensuring the long-term stability of the successful program.
They are rising 2.8%, in keeping with a rise in the DOL’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
They are on track to replace 75% of their income, compared to 64% for Americans overall.
Yet, a significant number are not saving for retirement at all.
On top of this, more than three in four worry Social Security could be extinct by the time they retire.
More than one-third of Gen Xers say they have no money at all saved for retirement, and 29% expect Social Security to be their primary source of retirement income.
"Having a plan in place to manage their finances can help retirees feel confident about spending their assets and address the fears that may be holding them back,” says Marcy Keckler, vice president of financial advice strategy at Ameriprise Financial.
In the DC retirement plan industry, it is simply taken for granted that everyone should be saving more and that everyone should save as much as they possibly can; commentator Andrew Biggs offers some important caveats to the seemingly sensible recommendation.
Prudential Financial experts anticipate Social Security’s funding shortfall will likely result in program changes over time, such as reducing cost-of-living adjustments, raising the full retirement age beyond 67 or cutting benefits.
According to the Social Security Board of Trustees, the total annual cost of the federal benefits program is projected to exceed total annual income in 2018 for the first time since 1982, and remain higher throughout the 75-year projection period.
Asked about the major reasons they want to work beyond the traditional retirement age, Americans point to both wants and needs. The most common response is that people want to stay active and involved, or that they simply enjoy working; a fifth say they expect to need to work.
One clear point of concern in the data is the increasing number of Americans who anticipate retiring at 70 years or older than in the “traditional 65 to 69 range.”
Future retirees expect a greater monthly payment from Social Security than what current retirees say they collect, according to a survey from Nationwide.
A poll by LendEDU finds 46% of Americans would participate in a proposed program that would provide loan forgiveness to borrows who agree to delay eligibility to collect Social Security.
Their primary concerns are the continuation of Social Security and rising health care costs.
However, changes in the retirement landscape suggest that future retirees will face much more difficulty.