Published: 10:58, April 18, 2024
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Retirement crisis looms for millions in US
By Belinda Robinson in New York
A woman attaches a note of wishes on the wish tree at San Diego Zoo, in San Diego, California, the United States, on Feb 4, 2023. (PHOTO / XINHUA)

Millions of people in the United States who will retire in the next decade or so face a potential crisis because many do not have any, or enough, savings, experts warn.

At least half of women and 47 percent of men between the ages of 55 and 66 said they have no retirement savings, according to US Census Bureau data. The average age of retirement in the US is 65 for men and 62 for women.

Many approaching retirement have been forced to put saving on the back burner because of the rising cost of rent, inflation, credit card debts, healthcare and low wages.

In a February report, the Senate Health, Education, Labor and Pensions Committee found nearly half of all US citizens may be financially insecure in retirement.

"More than half of older Americans have no retirement savings," Bernie Sanders, the 82-year-old chairman of the committee, said.

"More than 50 percent of our nation's seniors are trying to survive on an income of less than $30,000 a year. That is absurd. Congress must address the retirement crisis facing working class Americans across our country."

A clear-cut system was in place to ensure that most workers could save for retirement involving a pension, Social Security benefits and defined contribution plans, such as a 401(k) plan.

In the mid-1980s, half of all private sector workers had a pension, but by 2022 that number had dwindled to just 15 percent, figures from the Bureau of Labor Statistics showed.

While most retirement savings come via an employer plan, nearly 57 million US people work for a company that does not offer one, according to AARP, an organization focused on people over 50.

Social Security payments provide 90 percent of income for one-fourth of seniors, CNN reported. But the Social Security trust fund faces a 75-year deficit, meaning by 2030, it may only be able to pay some retirees' benefits if the issue is not fixed.

About 68 percent of people who work in the private sector have access to a 401(k) plan, but only 50 percent utilize one.

Richard Alba, a sociologist and distinguished professor emeritus at the City University of New York and at the University at Albany, State University of New York, said: "The population is getting older. That certainly creates some real challenges (especially) with the financial support of older Americans through Social Security or pension systems."

At least 250,000 seniors were homeless at some point in 2019, according to the US Department of Housing and Urban Development. Many end up in a shelter.

"The numbers are increasing," Lisa Glow, CEO of Arizona's largest homeless center, the Central Arizona Shelter Services, told China Daily about the number of seniors she sees.