We are in the midst of a great change in the way that we view retirement and consequentially how we must save for it. Retirees are now more than ever “retiring” less and less conventionally; it is now no longer just completely stop working and sit around. For a large amount of retirees, retirement has now taken on a huge amount of different connotations, including traveling, working part time at a local business or finally starting to pursue lifelong interests. It appears that retirement is starting to become more a stage of life to pursue things these retirees couldn’t do while working full time and it is a very nice concept. It certainly does take extra saving to be able enter this stage of your life as you desire, but nonetheless it seems quite rewarding. With many Americans dreaming of being a part of this new type of retirement when their time comes, it begs the question of how is America doing with the retirement savings? Unfortunately, it seems that this type of retirement (and even retirement altogether) seems like a fairytale for a staggering amount of Americans.

Experts estimate that for a worker to keep his or her current standard of living, one needs to have available anywhere from 10 to 20 times what they earn each year. Despite these numbers about 36 percent of American workers have less than $1,000 in retirement savings (outside their homes and pension plans) according to the Employee Benefit Research Institute. Furthermore, 60% of Americans hold under $25,000, and 58 percent have debt problems.

How will anyone be able to retire comfortably with these assets, let alone retire at all? The current retirement-income deficit (the difference between the retirement resources current American workers will need and the retirement resources they have) stands at a staggering $6.6 trillion. This is not just the blue collar workers or those making minimum wage, this is most of America. Another study found that among middle-class working Americans, nearly half will be poor or almost poor in their retirement years, able to spend just $5 a day on food.

Many attribute this to the fact that the Great Recession has not brought anything to counteract the forces in an equal and opposite way. The vast majority of people for a few years were simple worrying about providing for the next day, not about retirement down the road. While everyone has dreams to retire and pursue their passions it seems more and more like a non-possibility. With the ever changing definition of retirement it will be interesting to see how our current retirement crisis plays a role in it.

Sources:
http://www.huffingtonpost.com/arianna-huffington/its-time-to-retire-our-definition-of-retirement_b_5774878.html
http://www.nirsonline.org/index.php?option=com_content&task=view&id=768&Itemid=48