Monday , 22 October 2018


The Retirement Crisis: The Elderly are Broke

A study released by GoBankingRates reveals that older people planning theirretire retirement have cause for concern. 42% of Americans are facing their golden years with less than $10,000 in savings.

The original article has been edited here for length (…) and clarity ([ ]) by munKNEE.com – A Site For Sore Eyes & Inquisitive Minds – to provide a fast & easy read.

A lack of savings and planning has reduced what should be an enjoyable time in seniors’ lives to a period of stress and worries for many.

  • Out-of-pocket expenses for health care…[are] spiraling. The Bureau of Labor Statistics indicates that Americans 65 years of age and older may spend up to $46,000 annually on healthcare.
  • This is not good news for those with only $10,000 on which to fall back on.

For adults over 50, this should be a call to act now, while there is still time. Only 33% of adults in that age group have savings greater than $10,000. Retirement planning needs to become a priority, as there is little time to waste.

  • Pensions are becoming rarer.
  • Social Security is becoming less secure than it used to be.
  • Many health needs of seniors are not covered by Medicare.
  • Some experts believe the Social Security system will be depleted by 2030.

Adults over the age of 50 need to consider making contributions into 401(k) accounts or similar retirement plans.

Social Security was never intended to be the sole income of retiring seniors. It was meant to supplement approximately only 40% of post-retirement spending. Social security was supposed to enhance seniors’ lives, not support it entirely.

  • According to Investopedia.com, 43% of unmarried seniors rely on Social Security to cover 90% of their basic needs.
  • Almost 25% of married couples depend on Social Security to meet most of their expenses.

Some seniors struggling with poverty are able to receive supplemental income (“SPM”), such as food stamps for a bit of additional help. The need is especially high for seniors who are women, African Americans, and Hispanics, and those with ongoing health issues.

6,400,000 million American seniors are living at poverty level, struggling to meet fundamental needs such as rent and food. This number is likely to increase as more boomers become eligible for Social Security and the system becomes less able to support them.

What does this mean for the Millennial generation?

  • The current Social Security system will be unsustainable at some point. It cannot continue at the current level. It probably won’t be abolished, as that would cause chaos for seniors. However, Millennials are aware that changes are coming. They know that benefits will likely be reduced by the time they grow older.

The good news is, Millennials are aware of the problem. Members of the boomer generation who assumed Social Security would take care of their needs are learning a hard lesson.

Scroll to very bottom of page & add your comments on this article. We want to share what you have to say!

Related Articles From the munKNEE Vault:

1. Retirement Has Become A Myth For the Majority – Here’s Why

40 years ago, a grand experiment was embarked upon that promised American workers that by contributing to newly introduced defined contribution vehicles they would be better off when they reached retirement age. That raises a simple but very important question: How have things worked out? Well, the bottom line is that the vehicles and the promises made are proving woefully insufficient to fund the “retirement” dream you’ve been sold your whole life. Frankly put: retirement is now a myth for the majority.

2. 7 Ways To Catch Up On Savings For Retirement

With longer life spans, inflation, and increasing health care costs, it’s possible that many retirees won’t have enough to comfortably sustain their retirements. Here are 7 smart moves will help you catch up on savings even late in the game.

3. How Much Do I Need To Retire?

There are all sorts of rules of thumb about saving for retirement but, while they can be helpful as a baseline for setting expectations, you need to make a plan and monitor your progress as you age to be effective in the real world.

4. 7 Roadblocks to Retirement & How to Overcome Them

It’s nice to think about the day when you can…spend your time relaxing, traveling, and enjoying life to the fullest. Well, if you want that dream to become a reality, you may need to make some significant life changes now.

5. 6 Arguments For Maxing Out Your 401(k) Contribution

Maxing out your 401(k) is often the best way to accumulate a healthy sum for retirement, and there are great tax benefits as well…Consider these 6 arguments.

6. How to Retire With Less Than $1 Million in Savings

The sad truth is that many Americans are vastly underprepared when it comes to retirement savings with a 2016 GoBankingRates survey revealing that 33% of Americans have nothing saved for retirement at all and, in total, 56% have less than $10,000 saved. [That begs the question] “How much money does it actually take to retire comfortably?” It seems like one million dollars is the magic number many people think of but is it really necessary? Could some people could get by in retirement on less? Let’s explore all the different ways you could live a happy retirement even if you don’t amass a million-dollar nest egg.

7. You’re Probably Investing The Wrong Way For Retirement – Here Is A Better Way

In my view, most people who are selecting stocks for their retirement are doing it wrong. Most investors are picking “good companies,” stocks that have gone up a lot in the past, stocks of companies that are soon to release higher earnings, or stocks that have been selected because the technicals look good. All of these make for lousy long term investments. Here’s a better path to retirement bliss, one that’s much more likely to work out if you are prepared to put just a little bit of time and effort into your portfolio.

8. 5 Kinds of Insurance Every Retiree Should Consider

Your insurance needs don’t remain constant throughout your life. You need different insurance coverage when you’re single and in your 20s than you do when you’re raising a family in your 40s. When you retire, your insurance needs will evolve once again…Here is a primer on the kinds of insurance that every retiree should consider.

9. Your 401(k) Plan Is Your Most Powerful Investment Account – Here’s Why

What makes your 401(k) plan the best place to invest your money for the long term? In this post I will show you all of the reasons why this type of investment account has the greatest impact on the growth of your money.

10. The U.S. Is Shifting To A “work until you die” Retirement Plan – Here’s Why

…The global pension outlook is looking bad and a large part of this stems from people living longer and simply not saving enough while they work…By 2050 global pension funds will be underfunded by $400 trillion. Does this sound sustainable?

For all the latest – and best – financial articles sign up (in the top right corner) for your free bi-weekly Market Intelligence Report newsletter (see sample here) or visit our Facebook page.