Two out of five older middle-class citizens working in the United States are expected to slide into poverty in retirement, a recent study has found.
“Public policy that relies on the hope that people can work longer to make up for eroding pensions is not realistic,” labor economist and co-author of the study, Teresa Ghilarducci said in a series of Twitter post. “Hope is not a plan.”
Roughly 8.5 million U.S. citizens are at risk of living in poverty in their old age, according to the Schwartz Center for Economic Policy Analysis at The New School (SCEPA).
The study states that “if workers ages 50 to 60 retire at age 62,” which is the average age of retirement, “8.5 million people are projected to fall below twice the Federal Poverty Level.”
Around 2.6 million are expected to be hit the worst with retirement incomes well below the poverty line at US$11,700.
While the cost of living depends greatly on the town (or city), state, and region, the national average is about US$53,000 US dollars.
Poor health and lack of employment options are two areas of concerns laid out by SCEPA.
Older populations receive the most medical care out of any other demographic in the U.S.
In 2010, healthcare costs for a person aged 65 and older added up to about US$18,500 US dollars. It’s anticipated that by 2050, 83.7 million people will be 65 and older according to the U.S. Census Bureau.
Researchers are calling for protective measures to be put in place, like strengthening social security and creative guaranteed retirement accounts (GRA).
GRA accounts would include mandated employer/employee pension contributions, tax-credit refunds for those receiving low-income wages, and managing retirement accounts in diverse funds.
Retirement security has been of grave concern since accounts lost about US$2.8 trillion US dollars in 2008 as a result of the stock market crash.