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1/21/2013 0 Comments

Middle Class Struggles to Save for Retirement

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Searching for retirement savings rainbow
AARP has released an important study that looks at the challenges the middle class is facing on the road to a secure retirement. Authored by Barbara A. Butrica of the Urban Institute and Mikki D. Waid of the AARP Public Policy Institute, the conclusions are many; here are some of the key ones:
  • Future retirees are expected to have slightly more retirement income than today's retirees, but these gains will be wiped out by higher out-of-pocket medical expenses.
  • Social Security will be the main source of retirement income at all income levels, including 51% of per capita household income for future middle-income retirees, rising to over 80%for downwardly mobile middle-income retirees who will move into the lower-income group.
  • Middle-income workers who move into the higher-income group in retirement will achieve this primarily by working longer (e.g., age 70)
  • The retirement income gap among racial and ethnic groups is expected to narrow as the youngest groups move closer to retirement.
  • The recent recession is expected to adversely affect the age 45-54 group as they have less time to regain losses as compared to current retirees.
  • Rising out-of-pocket medical expenses will neutralize any improvements in retirement income and declining poverty rates.
  • It will be difficult for future retirees to keep pace with the middle-calss standard of living.

The full report, What Are the Retirement Prospects of Middle-Class Americans?, is available on the AARP website.


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    Blog Author - Ken Felsher

    With over 25 years of writing, editing, and research experience. I enjoy sharing with my readers my love of working with content on a variety of subjects.

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