More Americans Resigned to Retirement At 70, or Never


A new study reveals most Americans now are facing the bleak reality that they may not be able to retire until age 70, or beyond… or maybe not at all.

Even more sobering, almost one-third of all Americans nearing retirement age admit they have absolutely no retirement savings at all, reports The Motley Fool of USA Today.

In the past, the “magic number” most Americans looked forward to was retiring at age 62, when they could leave their job behind and enjoy the fruits of their labor.   Late retirement was considered to be 65.   Now, even those who planned to retire at 65 aren’t so sure, thinking there’s a 50% chance they may have to keep working until they’re 70.

Even worse, about 5% are afraid they’ll never be able to retire, according to a recent study by Willis Towers Watson, a human resources consulting firm.

Among younger workers, almost 25 percent of people under 30 believe they will have to work past age 70, and 33 percent of people in their 40’s also do not believe they will be able to retire before age 70.

Lack of Savings.   Social Security is not designed to fully fund a secure retirement –  it only replaces about 40 percent of an average income.   To have a comfortable, secure retirement, most Americans have to set aside a retirement savings of their own as well, but the study indicates many are not doing that, and a whopping one-third have no savings at all.

The Pros and Cons.   The Willis Towers Watson study says in spite of earlier reports that working longer can lead to better health and a longer life, a full 40 percent of those surveyed who expect to work till 70 or beyond report higher-than-average stress levels.

Working longer does give an employee “more opportunities to save,” the study claims.   It also shortens the number of years you spent in retirement, “which can help your savings go further.”   As if that is supposed to be a comfort.

Working longer also gives an employee longer access to their employer’s health insurance benefits, which are better than Medicare… provided the job is secure and the employee still has good enough health to continue working.

Recommendation: Save Money to Retire Sooner

The Motley Fool recommends that young people should avoid this bleak outlook by starting their own retirement savings account.

If you start saving $300 a month at age 25, invest your savings, and generate an average annual return of 8% (which is more than doable with a stock-heavy portfolio), by age 65, you’ll have over $932,000 to fund your retirement. Increase that $300 to $400 a month, and you’ll have over $1.2 million. But if you wait 10 years to start saving that $300 each month, you’ll have just $408,000 by age 65 — a reasonably impressive figure, but less than half of what you would have accumulated had you started saving right away.



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