If you’re worried about running out of money in retirement, you are not alone. For individuals and couples near retirement age, this fear is the number one concern for the vast majority of Americans. According to a study by Allianz Life, more than 60% of baby boomers are more afraid of running out of money than dying. For people aged between 44-49, it’s 77%, and 82% if they are married with dependents. Clearly, proper financial planning has not been a priority for way too many workers throughout their careers. Additionally, Americans are living longer and saving less, all while inflation has come roaring back.
These fears, however, are not unfounded. According to a report by the Employee Benefit Research Institute (EBRI), many of our fellow Americans will indeed run out of money. Their model predicts that 40% of all U.S. households, where the head of the household is between 35-64, will suffer a shortage of funds in their retirement years. The data, across all income levels for those who will be retired for 35 years, is sobering.
*83% of baby boomers in the lowest income quartile will run out of money
*47% of boomers in the second lowest quartile
*28% of boomers in the second highest quartile
*13% of boomers in the highest quartile
For those in retirement only 20 years, the data is only slightly better. 81% of the lowest income quartile and 8% in the highest income quartile will run out of money. Pensions used to be the rock of retirement income, but pensions are virtually dead for private sector Americans. Our population, like many Western countries, is heavily skewed toward retirees which is pushing Social Security toward insolvency. By 2034, Social Security is predicted to default on its obligations. Some may even find themselves forced off of Medicare and onto Medicaid, while many others may be forced to take on part-time work to fill the financial gaps.
These are the facts, but you don’t have to be part of these troubling statistics. Fear can be a great motivator, so I encourage you act today and start taking the proper steps to shore up your financial future. Click on this link and set up a free 30 minute consultation to see how Avista can help you take control of your finances and achieve your retirement goals. https://avistawealth.com/contact-us/