Many Have Little to No Savings as Retirement Looms
By: Stephanie Castillo
Updated: December 5, 2011
After a vicious decade of no growth for the stock market,
including two 401(k)-eating bear markets and persistently sky-high
unemployment, more Americans are finding themselves in their 50s and 60s
with practically no money saved for retirement.
"We were in our 30s, blinked, and now we're our parents' age,"
says Alan Tipps, a corporate jet pilot who typically earns
more than $100,000 a year when he's working. But Tipps, 52, has been
laid off three times during the past four years, and says that has
forced him to burn through what was in his 401(k) just to "keep the
lights on" in his home in Portales, N.M.
Investors of all ages have suffered. But for those close to
retirement, it's been especially tough, because they're faced
with taking distributions from investment portfolios that in some cases
are a fraction of their peak value. Forced early retirements and the
near extinction of pensions are making things worse, creating a
generation of aging investors in which some have little
or no plans for how they're going to pay for retirement.
It gets more ominous, given the other changes Americans are
facing. Declining property values have drained home equity that
many retirees might have counted on. Meanwhile, the number of people
reaching retirement age is soaring as the Baby Boom generation ages.
Meanwhile, data show that many workers nearing retirement age
have saved nowhere near the amount they need, and many have
very little savings. More than half of all workers, 56%, say they have
less than $25,000 in savings, according to a survey by the Employee
Benefit Research Institute.
Financial advisers say they're seeing an increasing number of
workers and new retirees with no savings and no plan to dig
out of debt. "There are a lot more people behind the eight ball," says
Joel Redmond, a financial planner for Key Private Bank in Syracuse,
N.Y.
(Copyright: USA Today) read more
(Copyright: USA Today) read more
