Work/Life/ Retirement
By Jason Walsh Americans facing ‘retirement crisis,’ survey finds T he dream of spending one’s golden years traveling, adopting fulfilling hobbies and trying new restaurants is morphing into a distant dream for many Americans, according to a new survey. “An overwhelming majority of registered voters believe the nation is experiencing a retirement savings crisis,” say officials from investment company BlackRock, which commissioned the survey. The survey was conducted in August by Public Opinion Strategies (POS) and found that 90% of registered voters believe there is “currently a retirement savings crisis in America,” and only 22% are “extremely or very confident” about having enough money to live on through their retirement. The problem is largely down to Americans’ failure or inability in recent decades to save for the long term, according to BlackRock. As BlackRock Chairman Larry Fink wrote this year in his annual letter to stakeholders, “the first barrier to retirement investing is affordability.” “Four-in-10 Americans don’t have $400 to spare to cover an emergency like a car repair or hospital visit,” wrote Fink. “Who is going to invest money for a retirement 30 years away if they don’t have cash for today?” Nearly half of Americans aged 55 to 65 reported not having a single dollar saved in personal retirement accounts, Fink pointed out, citing U.S. Census Bureau statistics from 2022. Some of the findings in the survey are alarming: About 30% of respondents had no retirement savings to report; while 66% of voters have less than $150,000 saved (those same respondents estimated they’d need $2 million for a comfortable retirement). And, putting retirement savings aside, 26% of respondents did not have “any readily available savings” at all. Several demographic groups were far
more likely to have no retirement savings, POS found. That includes 53% of women ages 18-34, 40% of the Black community, 42% of women of color and 39% of rural residents. One of the sticking points, BlackRock found, is that even when companies offer a retirement-saving plan, nearly 20% of employees don’t enroll in them—and it’s largely not a conscious choice. It’s because employees aren’t adequately shown the process, or they’re busy with other responsibilities. This is why Fink has become an adherent to what University of Chicago economist Richard Thaler has called “nudges”—small changes in policy that can have big impacts on people’s financial lives. Which is why Fink urges companies to auto-enroll employees in 401Ks and their equivalents; studies show auto-enrollment increases retirement plan participation by nearly 50%. As it happens, starting in 2025, the SECURE 2.0 goes into effect. Enacted by Congress in 2022, most new 401(k) and 403(b) plans will auto-enroll employees— deferring between 3% and 10% of their pre- tax income to the investment plan, unless otherwise opted out by the employee. Such legislation, Fink says, is an indication governments can move toward becoming “laboratories for retirement.” “More should consider it,” he says. “The benefits could be enormous for individual retirees.”
10 states with the highest annual cost for retirement How much does one need to retire and still afford housing, groceries, transportation, health care, utilities, etc., in order to live comfortably from ages 66 to 80? It largely depends on the cost of living where you live. Based on information from the Bureau of Labor Statistics, here are the states with the highest annual cost for retirement: 1. Hawaii: $120,909 2. District of Columbia: $94,248 3. California: $83,279
4. Alaska: $79,249 5. Oregon: $78,439 6. New York: $77,911 7. Massachusetts: $77,122 8. Maryland: $73,111 9. Connecticut: $70,817 10. New Jersey: $67,764
22 NorthBaybiz
October 2024
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