Data from the Center For Retirement Research shows an alarming trend in wealth accumulation and retirement preparedness among Americans. The chart, which contains data going back to 1983, shows a stable pattern of wealth accumulation through the most recent survey in 2010. In 2010, accumulation of wealth dropped among most age groups due to the severe recession and unemployment crisis. The CRR suggests that even if the ratio of wealth to income returns to its historical norm, the fact that funding retirement is significantly more expensive than it used to be, means trouble for future retirees. In short, the CRR warns prospective retirees that having the same amount of assets as your parents won’t be enough to handle the rising costs of retirement. More here.
A new poll of 2,508 adults conducted by the Pew Research Center has found an increasing amount of anxiety over retirement savings but a shift in which Americans are expressing the most concern. In 2009, baby boomers were the most worried about funding their retirement but now adults in their late 30s and 40s are the least confident in their income and savings. Among adults between the ages of 36 and 40, more than half say they are not confident their assets will last through retirement, while only 34 percent of people ages 60 to 64 said the same. Overall, the number of Americans who express anxiety about financing their retirement has risen since 2009. According to Pew, the share of adults who aren’t confident in their ability to afford a comfortable retirement has risen from 25 percent in 2009 to 38 percent in the latest poll. More here.
While most studies concentrate on the financial status of those about to retire, new research from the Massachusetts Institute of Technology, Dartmouth College, and Harvard University looked at the assets of individuals and couples as they approached retirement, while they were retired, and as they aged. The results found that more than half of the elderly and one-third of elderly couples had less than $10,000 in savings and investments in the last years of their lives, highlighting the need for better and more accurate advance retirement planning. James Poterba, an economist at MIT, said there are a significant number of households that have a very small cushion if they encounter any kind of financial need. More here.