Planning for Retirement? Social Security Will Cramp Your Style
There’s a lot to be said about the aggregate retirement situation in America right now. According to a report published last year by Iowa Senator Tom Harkin, Americans are running a collective retirement income deficit — the difference between what people have save and what they should have saved — of $6.6 trillion.
Half of Americans have less than $10,000 in savings, according to the report, and a full 92 percent believe that there is a growing retirement crisis. (Savings estimates tend to vary wildly.) By and large, the data supports the pessimistic theory that there is a retirement crisis brewing. The personal savings rate in the United States right now is about 4.5 percent, nearly half the rate recommended for those with 40 years left until retirement.
Retirement savings accounts such as IRAs, 401Ks, and pensions are grievously underfunded — and persistently high long-term unemployment, which has forced millions of Americans to tap savings in order to pay for day-to-day needs, has exacerbated the problem.