Most Americans will outlive savings
A new study finds that three out of five middle-class Americans won't have enough saved to last through retirement with their current standard of living. Janet Babin reports.
Saving in a piggy bank (iStockPhoto)
More on Retirement - Saving
TEXT OF STORY
Scott Jagow: There's a new study out this morning about middle-class people and their retirement.
Marketplace's Janet Babin reports from North Carolina Public Radio.
Janet Babin: The study found that three out of five middle-class Americans retiring now will outlive their savings if they keep the same standard of living.
Tom Neubig of Ernst & Young authored the report for Americans for Secure Retirement. He says many people think their expenses will drop enough when they stop working, but that's not realistic.
Tom Neubig: They know that they won't be paying as much taxes, they won't have to be saving, they won't have work-related expenses, but this study shows that they'll have to much more significantly cut back on their current standard of living.
...By about 24 percent. And if you're five to 10 years away from retirement, you'll have to cut back even more.
Neubig says the reason we're so unprepared: Fewer pensions and defined benefit plans to supplement our social security.
Oh well, I guess we could all just sell the country home...
I'm Janet Babin for Marketplace.
Comments
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From Dallas, TX, 07/14/2008
The report is from a group called "Americans for Secure Retirement". They are pushing annuities as the method of ensuring a steady income stream.
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