The recession strikes again: More people can't afford retirement
As if lost jobs and foreclosed homes weren’t enough, here’s another lingering effect of the last recession: foundering retirement accounts.
Almost 3 million people ages 36 to 62 are now at risk of not having enough money to retire because their 401(k) accounts tumbled and the value of their homes fell during the recession, according to data released Thursday by the nonpartisan Employee Benefit Research Institute.
That figure measures only bare-bone readiness -– having enough for food, shelter and uninsured medical expenses.
“If we added in standard of living and luxury items it would be a much bigger” number of people, said Jack VanDerhei, who wrote the report.
And that’s not to mention the millions of others who already weren’t on financial track to retire.
Although the economy is improving, the data released by the Employee Benefit Research Institute are another indication of the long-term financial damage caused by the recession, which technically ended in June 2009.
As with most financial retirement issues, the answer is to save more money. The Employee Benefit Research Institute estimates that the average person nearing retirement age must boost his or her savings by 1% to 4% a year to get back on track.
Easier said than done in this economy.