Americans will lose trillions of dollars in retirement savings in less than five years

If you thought you had a lifetime to save for retirement, just ask retirement-age Americans who couldn’t save enough.

AARP says nearly one-third of Americans 50 years of age and older have faced career setbacks, like job loss and stagnant wages, that have halted their plans for retirement savings. This means by 2021, retirees will lose $4.3 trillion in retirement savings.

“Consumers say they have suffered career setbacks such as a layoff or wage stagnation, making it the No. 1 obstacle for saving money,” the study says. “And 21 percent of 50+ consumers report that career setbacks caused them to dig into their retirement savings to make ends meet. Recovering from these stumbles is complicated and has put millions of 50+ consumers behind the necessary pace to attain financial freedom.”

One of the biggest setbacks is employer-backed retirement help, like pensions. AARP says only 11 percent of Americans aged 50 and older are counting on pensions when they retire. For 65-and-older Americans, that’s at 46 percent.

The lack of employer help for retirement savings has hurt some older consumers who are self-navigating how to survive once they hit retirement age.

“Personal finance is a field that requires both comprehensive understanding and arcane specialization,” the study says. “Most Americans lack both, yet they make decisions themselves either out of choice or a lack of affordable professional services.”

Health is a huge financial concern for Gen Xers and young boomers

While the 50-and-older community represents 35 percent of the population; the AARP study says they control 56 percent of the country’s investible assets. Most of this group has been saving for more than 25 years; they’ve saved less than half of their retirement savings goals and 40 percent of them don’t think they’ll be able to retire until they meet that goal.

Because of this major financial setback, pre-retirement-age Americans are stressed about money more than they ever were in their lifetimes. More than one-third expect to work during “retirement” to support their financial needs.

Financial health and physical health have a huge impact on one another, and the AARP says 41 percent of 50+ Americans have suffered from a major medical issue in the last five years. Even with medical-related debt being a problem, only 11 percent of them have started to save for health-related emergencies. Since they anticipate more health-related problems later in life; many of these people admit that is what will keep them working long after they hit retirement age.

It’s not entirely wrong, as health care costs continue to grow. As women face living longer than their male counterparts, they should expect to pay more for health care as well. Not only that, long-term health care costs are increasingly becoming a burden on older Americans. While cheaper in some states, the overall costs are at minimum a few thousand dollars a year. Some Americans may want to move elsewhere to be able to afford these looming health care costs, like assisted living and home health aides, but since many believe they’ll be working well into retirement, they may not want to leave their current living situation, which could put their job situation in jeopardy.

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Meet the Author

Dori Zinn

Dori Zinn


Zinn is a freelance journalist based in Fort Lauderdale, Florida.

Budgeting & Saving, Career and Business, Retirement

401k, Baby Boomers, Gen X, save money

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Article last modified on September 18, 2018 Published by, LLC . Mobile users may also access the AMP Version: Job Problems Are Hurting Savings for Boomers - AMP.