Middle Class Sacrificing Retirement to Pay Bills
According to the recent Wells Fargo Retirement Survey, more than one-third of middle-class Americans may end up in poverty in retirement as most (52 percent) feel that their primary financial concerns are paying monthly bills; saving for retirement comes in a distant second at 16 percent. Indeed, 53 percent of respondents say that they are not confident they will have enough money saved before they reach retirement.
Nearly one-third of polled workers believe that they must work until they are 80 in order to have a comfortable retirement. However, 73 percent expect that their employers would not want them working in their 80s. About one-third of middle-class workers think that their retirement will consist of less than 50 percent of their current annual income which, for the median household income in 2011, was about $50,000.
“It is so tough for Americans to save for retirement, and we feel it is very important to keep shining the light on this issue. People say they’ll work longer, but how possible will this be for millions of Americans? Preparing for retirement can’t be kicked down the road because the other picture that is emerging is how many people will live very close to the poverty line in retirement. We’ve got to marshal our resources as a country, an industry and as individuals to deal with the issues creating this cliff,” said Joe Ready, director of Wells Fargo Institutional Retirement and Trust.
“People tell us that retirement preparation should be on their shoulders but they are grappling with the financial pressures of each day. As a result, retirement has become a guessing game. But, people can’t afford to approach twenty plus years of their life by ignoring the facts. People are telling us that times are tough financially – even more so than a year ago — but people also need to take action,” said Laurie Nordquist, director of Wells Fargo Institutional Retirement and Trust.