Economic Woes Might Mean Less Retirement in the US

Economic Woes Might Mean Less Retirement in the US

( – Money doesn’t seem to stretch very far these days, with everything from grocery bills and mortgage payments to saving for higher education costing more than ever. Of course, most people want to save for the occasional vacation and, hopefully, retirement. As inflation continues to rage and economic volatility grows as a few banks collapse, some financial experts believe retiring will become a bit harder for many Americans.

Fidelity Investments conducts a survey to take stock of America’s retirement readiness. The company’s most recent assessment came out on Tuesday, March 21. It detailed how our nation’s retirement score, which marks how prepared US citizens are for retirement, hit a low of 78, down five points from its highest mark in 2020. The report revealed that most Americans saving for retirement will only have 78% of their desired income when they are ready to leave the workforce, meaning they may have to stay employed longer or adjust their retirement expectations.

When split up by generation, Baby Boomers, born between 1946 and 1964, are the most prepared for retirement, garnering a score of 87. Generation X tends to be less prepared, with a score of 79, while Millennials have the lowest score of 72.

Fidelity Investments highlighted two main reasons the country’s retirement readiness has decreased. First, people are saving less as their money doesn’t go as far anymore, and second, they are investing more conservatively as they fear another recession.

The company suggests three main strategies to help people prepare for retirement. First, financial experts want Americans to save 15% of their pre-taxed income. If that is too much to start with, then begin with 1% and bump that up each year. Next, mix up your investment portfolios. Diversify with stocks, bonds, and cash as you feel comfortable. Lastly, delay collecting Social Security if possible.

The future of Social Security is also up in the air, so it’s critical that Americans take their retirement saving goals into their own hands if they want to live comfortably later in life.

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