Washington Post: Future Retirees at Risk of Downward Mobility
The retirement prospects of Americans are slipping for the first time in generations, according to a report released Thursday, adding a new voice to those warning that future retirees face the risk of downward mobility when they leave the workforce.
The report by the Pew Charitable Trusts said that Americans born after 1955 are carrying more debt than the generations that came before them, putting them in danger of not having enough savings to maintain their standard of living in retirement.
The report estimates that, at the median, Americans born between 1966 and 1975 — so-called Gen-Xers — will be able to replace just half their pre-retirement income once they stop working, well below the minimum 70 percent replacement rates recommended by most financial planners. Late baby boomers — which the report defines as those born between 1956 and 1965 — will be able to replace 60 percent of their working incomes in retirement, the report estimates. Both replacement rates are below what financial experts say is necessary for a secure retirement.
“Late boomers and Generation-Xers lost significant amounts of wealth during the Great Recession, eroding their already low levels of assets,” said Erin Currier, director of Pew’s Economic Mobility Project. “As policy makers focus on Americans’ retirement security, particular consideration should be paid to how younger generations of workers can make up for these losses and prepare for the future.”
Read the full article at washingtonpost.com.