Some worked longer, while others went deeper into debt to pay their bills. Yet, things are likely going to get worse for older workers’ retirement prospects. But a longer-term crisis is growing that will cause lasting damage to millions of people if it remains unaddressed. Reports from a variety of reliable sources indicate that the majority of American households do not have adequate retirement savings. Estimates based on Census data show that 18.4% of people 55 and older used their savings or sold assets to pay for their spending in June 2020. With widespread unemployment, the pandemic is estimated to have pushed over three million, According to government estimates, only about 40% of Americans have access to a, Even more troubling is the outsized impact on non-White Americans, women and those with lower earnings who work for small businesses. Indebtedness among older households has trended up over the past three decades. It is tied to long-term employment with large companies and doesn't fit today's gig economy. Why is the stock market soaring? Factset: FactSet Research Systems Inc.2018. This process could now be reversed as jobs quickly disappear. According to government estimates, only about 40% of Americans have access to a workplace retirement savings plan. You may opt-out by. MarketWatch Comments. It shows that the top 20% of families have 70% of retirement savings, while the bottom 80% have a combined share of 30% and the lowest fifth have only 1% of the total. There is no sugar-coated way to say this: we have a retirement savings crisis on our hands. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC 2018 and/or its affiliates. Furthermore, older workers typically also spend much longer looking for a new job after becoming unemployed. We face a looming retirement crisis that will impact millions of elderly and soon-to-be elderly Americans, as well as our children and grandchildren who will … Why? The Retirement Savings Crisis in America: What You Should Know 6 Minute Read You’ve probably been told the key to getting your employees ready for retirement is to be sure they pick the best investments available in their 401 (k). Given the ubiquitous claims of a retirement crisis, we should expect to see big changes over time in retirement plan coverage, participation and savings. The retirement crisis has been under way for a while. The good news is that there is a way to solve our nation's retirement crisis. The deep and prolonged economic pain now only accelerates it. Rising foreclosures could then result in lower house prices, making it more difficult for older households to sell their largest asset and obtain money they had counted on for their retirement security. Costs for one of the biggest spending item for household could go up just as incomes are falling. The average unemployment rate for workers 55 years old or older from March to June 2020 was three times higher at 9.5% than it was in 2019, when it averaged 2.7%. Moreover, there is no current adjustment mechanism, so benefits for people who are turning 60 years old in 2020 will never catch up to the levels of benefits for people who are just one year older, even if they had the same earnings during their careers. The current system must be fixed because it leaves too many people out. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. The three "legs" of the retirement "stool" (private savings, pensions, and Social Security) are all in dire shape. 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