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How Many American households are going to lack money?
According to the EBRI Retirement Security Projection Model, which was developed in 2003 and has been updated several times since, 40.6% of all US households led by a person aged 35 to 64 are expected to lack money during retirement. This is based on a database of 27 million 401 (k) participants and IRA account holders. This seems like many households are going to go short, but it is actually a decrease of 1.7 percentage points compared to the same model in 2014 – so things get a little better.
Unfortunately, for those families who are likely to run out of cash, the lack is not small. While taking into account social security schemes, the total household deficit for households is led by a person aged 35 to 64, $ 3.83 billion. Again, this is a slight decline from $ 4.44 trillion in 2014, but trillions are not good news for everyone.
When viewed individually, the data becomes even more worrying. In fact, the estimated EBRI average retirement savings are $ 12,640 for widowers, $ 15,782 for widows, $ 24,905 for single men and $ 62,127 for single women. Those who live the longest will also be far worse, with the Americans expecting to live the longest at 10.2 times the pension deficit compared to retirees with the shortest projected lifetimes.
This data should be worrying for everyone, because even if you are not one of the four in 10 Americans who want thousands too little in the Pension Fund, your friends and neighbors are likely among this cohort – and have millions of broken pensioners over The whole country is not exactly good news for the economy.
How can you make sure your household doesn't run out of money?
With such major financial shortcomings, the best solutions are likely to require systemic changes – such as an increase in social security benefits to provide more income for retirees or policy changes that facilitate broader access to retirement plans, as the EBRI found eligibility for the defined contribution plan as 401 (k) or 403 (k), has a significant impact on the pension deficit. For people 35-39 who are not eligible for a deposit-based scheme now or in the future, the pension deficit is expected to be $ 78,046 – which is more than five times the average pension deficit of $ 14,638 that people with 20 years of future eligibility in a deposit-based face.
The pension deficit is a major problem
The EBRI data clearly shows that Americans are severely ill-prepared for safe retirement. Large-scale changes are needed, but with less and more to the future, individuals need to make sure they prioritize their own pension savings and find ways to set aside cash for the future.
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