Olde Hornet
Well-Known Member
Interesting read
Financial planners typically advise people to work for as long as they can in order to juice up their retirement savings while holding out for a fatter Social Security check.
But such advice presumes that people have the luxury of deciding when to stop working. Tens of millions of Americans don’t.
Here’s the truth: The idea of retiring early — or even at full retirement age — is little more than a joke for those tens of millions. Retire on what? Most folks have a fraction of the assets they’ll need. And pensions? Unless you work for the government — state, local or federal — chances are you don’t have one.
It’s things like the decadeslong trend of companies shifting the financing of retirement off their own balance sheets and making it the responsibility of their workers that mean millions of people have to keep working whether they want to or not. But as the Economic Policy Institute, a Washington, D.C.-based nonpartisan think tank, notes in a report, “Many face barriers to working longer and lack access to decent jobs with decent pay. Older workers who cannot afford to retire often face diminishing job quality and earnings as a result of loss of bargaining power.”
It’s a painful Catch-22.
The Federal Reserve said in a 2020 report that white families have the highest level of both median and mean family wealth: $188,200 and $983,400, respectively. Median — which means half have more and half have less — is the key figure here: Using the often-recommended 4% withdrawal rule, a person with $188,000 would have about $7,500 each year to live on. That’s a paltry $625 per month before taxes.
Think that’s bad? Now consider the Fed’s data on Hispanic and Black families. The median wealth for Hispanic families is $36,100, while for Black families it is a meager $24,100.
Why ‘work longer’ isn’t great retirement advice
Can't afford to retire? Why 'work longer' isn't great retirement advice.
Keep on working, financial advisers say. But that's easier said than done.
www.marketwatch.com
Financial planners typically advise people to work for as long as they can in order to juice up their retirement savings while holding out for a fatter Social Security check.
But such advice presumes that people have the luxury of deciding when to stop working. Tens of millions of Americans don’t.
Here’s the truth: The idea of retiring early — or even at full retirement age — is little more than a joke for those tens of millions. Retire on what? Most folks have a fraction of the assets they’ll need. And pensions? Unless you work for the government — state, local or federal — chances are you don’t have one.
It’s things like the decadeslong trend of companies shifting the financing of retirement off their own balance sheets and making it the responsibility of their workers that mean millions of people have to keep working whether they want to or not. But as the Economic Policy Institute, a Washington, D.C.-based nonpartisan think tank, notes in a report, “Many face barriers to working longer and lack access to decent jobs with decent pay. Older workers who cannot afford to retire often face diminishing job quality and earnings as a result of loss of bargaining power.”
It’s a painful Catch-22.
The Federal Reserve said in a 2020 report that white families have the highest level of both median and mean family wealth: $188,200 and $983,400, respectively. Median — which means half have more and half have less — is the key figure here: Using the often-recommended 4% withdrawal rule, a person with $188,000 would have about $7,500 each year to live on. That’s a paltry $625 per month before taxes.
Think that’s bad? Now consider the Fed’s data on Hispanic and Black families. The median wealth for Hispanic families is $36,100, while for Black families it is a meager $24,100.