Ready for the golden years? Facts on re­tire­ment sav­ings

Imperial Valley Press - - OPINION -

NEW YORK (AP) — Amer­i­cans plan­ning for their golden years got a few more gray hairs last week when Wash­ing­ton floated the idea of cur­tail­ing the tax-de­ferred con­tri­bu­tions that work­ers make to their 401(k) ac­counts. Pres­i­dent Don­ald Trump quickly pushed back on the pos­si­bil­ity, but a key Repub­li­can tax cut­ter re­sponded by say­ing an ad­just­ment to the 401(k) is still on the ta­ble. The de­bate raises the ques­tion: Just how ready are most Amer­i­cans for re­tire­ment?

Most peo­ple will need a com­bi­na­tion of sav­ings and So­cial Se­cu­rity to get by, money they might need to stretch over decades. Some are bet­ter able to save be­fore re­tir­ing than others. And it’s al­most in­evitable that as a per­son ages be­yond 65, they’ll pay more for health care. As Amer­i­cans await the fate of their 401(k) con­tri­bu­tions, here are facts to keep in mind about the na­tion’s re­tire­ment readi­ness:

1. A lit­tle more than half of Amer­ica has a re­tire­ment ac­count, such as a 401(k) or In­di­vid­ual Re­tire­ment Ac­count, ac­cord­ing to the Fed­eral Re­serve.

2. Not ev­ery­one can save in a 401(k), even if they want to, be­cause not all jobs of­fer one. Only 35 per­cent of low-in­come work­ing house­holds had ac­cess to a 401(k) or sim­i­lar plan, ac­cord­ing to a re­cent study by the U.S. Gov­ern­ment Ac­count­abil­ity Of­fice. For high-in­come house­holds, mean­while, it’s 80 per­cent.

3. The typ­i­cal house­hold with a re­tire­ment ac­count had $60,000 last year, but there’s big vari­a­tion. Among the top 10 per­cent of house­holds by in­come, the typ­i­cal amount of sav­ings was $403,000. Mid­dle-in­come house­holds had a me­dian of $25,000.

4. Mil­len­ni­als have more than their par­ents did at a sim­i­lar age. The typ­i­cal house­hold led by some­one aged less than 35 with a re­tire­ment ac­count had $12,300 last year. In 1989, those same kinds of house­holds had $7,500, af­ter ac­count­ing for in­fla­tion.

5. The age to get full re­tire­ment ben­e­fits from So­cial Se­cu­rity is mov­ing higher. Some­one who is 66 years old to­day can get full ben­e­fits. But full-re­tire­ment age will move up slowly, be­gin­ning with peo­ple born in 1955, un­til it hits 67 for peo­ple born in 1960 and later.

6. Re­tire­ment can last for decades. Once an Amer­i­can woman gets to 65 years old, life ex­pectancy is an ad­di­tional 20.6 years, ac­cord­ing to the Cen­ters for Dis­ease Con­trol and Pre­ven­tion. For men, it’s 18 years.

7. Don’t for­get about health care costs. A 65-yearold cou­ple will need an es­ti­mated $275,000 to cover health care and med­i­cal ex­penses through their re­tire­ment, ac­cord­ing to Fidelity. That doesn’t in­clude nurs­ing-home or long-term care costs.

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