Retirees Who Saved Still Heading to the Poor House

By Retirement FOXBusiness

Today, 48 million retired Americans receive Social Security benefits. By 2035 that number is expected to almost double to 79 million. The average monthly benefit is currently $1,348 dollars or $16,176 a year, which is just a few thousand dollars above the federal government’s poverty threshold for a single individual. This is one reason supplemental retirement savings like 401ks and IRA accounts are crucial.

Continue Reading Below

However, 31 percent of all working Americans have no retirement savings outside of Social Security, according to the Federal Reserve. And while 65 percent of the private sector workforce has access to retirement savings accounts like IRA’s and 401ks, only 48 percent actually contribute to them.

The Middle Class is Vanishing

Consequently, 52 percent of working Americans will be unable to maintain their pre-retirement standards of living upon exiting the workforce, according to the Center for Retirement Research.

More troubling still is the prediction that many people who are working and saving diligently will still fall out of the middle class when they retire.

The Federal Reserve's survey of consumer finances shows households with access to retirement accounts have on average $110,000 to supplement Social Security when they retire. That amount is only one-third of the funds a retiree will need to supplement Social Security in order to avoid a drop in their standard of living, according to retirement counselors and analysts.

And if you look at all working households, including those with limited access to a 401k plans, the average amount saved to supplement Social Security upon retirement is just $14,500, according to the same Fed survey.

Continue Reading Below

Those dire numbers mean 25 million Americans working right now will fall into poverty when they retire around 2050, experts warn.

What do you think?

Click the button below to comment on this article.