I was perusing Kiplinger News the other night when I came across an article discussing how the economic downturn has really hit the retirement security of lower income individuals. I found this paragraph interesting:
I guess what I find the most interesting about that ‘statistic’ is that only half of these lower income people don’t feel confident about retirement. I would think the number would be closer to 90 or 100 percent of people that make less than $25,000/year would feel ‘insecure’ about their retirement prospects. Perhaps many of the people surveyed that felt secure about retirement are counting on Social Security to care for them in their elder years? Maybe some have pensions? Perhaps the low income earners are not aware of how much money it truly takes to retire? Or, are they thinking of working forever, and just being retired for a few years? Think of how little $25,000 really is. The people in this study were already over the age of 45. Therefore, I assume that their ability to save in their younger years was minimal, as their salary was (probably) even less then. Who can think of setting money aside for retirement when you have a house payment and need to put food on the table? What worries me is that possibly people feel overconfident because of a lack of knowledge. I know from dealing with family members that have Medicare and supplemental insurance that medical/prescriptions costs can still be very high. Not to mention the regular bills that still need to be paid such as taxes, utilities, car payments, food, etc. How can Social Security cover all of that? Not to mention that nobody knows how solvent Social Security will be when these people retire in 20 or so years. So, are you surprised that more of the lower income people surveyed were NOT more worried about financing retirement? Do you think it is a lack of education, having unrealistic expectations, or do you agree that they should be just fine?