Kerby Anderson

A significant percentage of Americans have little or no retirement savings. That means that future debates about Social Security may become even more contentious than they have been in the past. As I have discussed in previous commentaries, the only thing in the Social Security trust fund are IOUs. Sometime in the future, the government may not have the necessary funds for all the Baby Boomers who are currently retiring.

A report from Northwestern Mutual found that one in five (21%) Americans have NO retirement savings at all. The survey also found that two-thirds of people with a savings account or retirement plan are certain that their money will run out sooner than they hoped it would. That means they would be totally dependent upon Social Security.

Even when implemented, Social Security wasn’t intended to fund people‘s retirement for such long times. It was originally intended to provide income supplement for men for about 13 years and for women for about 15 years. That was the life expectancy for 65-year-olds in 1935. Of course, Americans now live more than a decade longer.

When you look at the Baby Boomers who were polled, you find that one in three has $25,000 or less in their retirement savings right now. Many of them are already thinking of extending their retirement dates. In fact, Northwestern Mutual estimates that nearly one in four (38%) will retire at age 70 or older. Because of medical advances, people between the ages of 65 to 70 are often fortunately able to work longer.

But the bigger issue is not whether they are “able” but rather whether they are “willing” to work. Given the option, most Americans would like to kick back and retire at 65. The latest surveys about retirement savings make that less likely. So we will probably observe a graying of the workforce.