Can you afford to Retire in the USA?

Dear GAA Friend,

Although many US citizens are living longer and fewer are in physically demanding jobs, those who plan to work longer may be unrealistic. A recent survey found that 47 percent of retirees left the workforce unexpectedly, largely because of disabilities, other health issues or problems at work.

At present, the largest group of workers leaves the workforce at age 62. That is when they initially qualify for reduced Social Security retirement benefits, which represents a smaller monthly amount for those who take it before hitting their full retirement age. Just 14 percent of the retirees leave the workforce after age 65.  Only one in four of them works for pay in retirement.

The risk is that many workers as they get older cannot work for reasons beyond their control, including disability, ill health, and loss of a job and inability to get another.

US workers have to plan to work as long as possible. One-third of workers say they or their spouse have not saved anything for retirement. And only 57 percent says they are actively saving for retirement.

The result?  Many are unprepared to stop working. Nearly three in five workers have assets, beyond their homes, of $25,000 or less. A third of those withdrew savings to pay for expenses in the last year, a survey found.

A big problem, researchers have said, is that too few workers are covered by retirement plans on the job. Those that are covered most frequently have a 401(k) or another defined contribution plan. But as many as one in four of people with those plans dip into them for non-retirement purposes.

Although US citizens are aware that retirement requires substantial savings, they are often unable to put away enough as they wrestle with expenses and burdensome debt.

While it appears that workers are not being smart about their retirement needs, what is the responsibility of their employers and the US government that makes the rules about Social Security? Why are their any exceptions to paying into Social Security for US workers?  What about the "minimum wage"?   Isn't it too little to support oneself?  How can people in the US have a "good old age" if their government and bosses have held their wages down? 

What do you think?   What was/is your experience? Please send GAA a comment on this important topic.

Thanks and have a good week, Susanne Paul for Global Action on Aging