The country faces a growing retirement crisis. This reality has not gone away because recent favorable trends have temporarily helped out older workers. More jobs and higher retirement balances are certainly welcome, but retirement security will likely take a sharp turn in the next recession.
. An ever larger share of the fastest growing part of the population will struggle to make ends meet in retirement. Estimates show that many have not saved enough to offset declining Social Security benefits and rising costs due to greater longevity and health care inflation, just for starters.
The reality of the retirement crisis has not gone away because recent favorable trends have temporarily helped out older workers the outlook for retirement security will become worse much faster in the next recession than in previous onesJust consider the relevant economic trends over the past three recessions. Unemployment for workers aged from 55 years to 64 years quickly increased in all three past recessions – in 1990, in 2001 and from 2007 to 2009.
The need to keep on working for older workers reflects the lack of savings overall. About 40% of near-retirees – those aged from 55 years to 64 years, who weren’t yet retired – had no retirement savings at all in 2016. And the median amount in those retirement accounts for those who had any was $100,000 in 2016. Spread out over 15 or 20 years this amounts to a few hundred dollars a month – too little to serve as a serious cushion in a recession.
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