In a survey of 1,000 middle-income workers between the ages of 25 and 75, Wells Fargo found that well over half of respondents did not expect to retire by their mid-sixties. Thirty-four percent expected to work well into their eighties – a figure that was up from 30% in 2012 – and thirty-seven percent planned to work until they died. Those surveyed overwhelmingly stated that they simply didn’t have enough saved to retire “on time,” nor did they feel able to ramp up their savings with their current income and expenses.
According to CNN Money, which reported on the survey, the inability of middle class Americans to save enough for their retirement is driven by a variety of economic forces. For one, the Great Recession wiped out a lot of middle-income Americans’ savings, losses that are only beginning to be recovered now. The recession is also to blame for massive layoffs and reductions in income, both of which make it difficult to save. At the same time, costs related to healthcare, education, and childcare continue to climb.
There also seems to be quite a bit of trepidation among middle class Americans about investing in the stock market – only 24% of those surveyed agreed that their retirement savings could be trusted to the markets. This is problematic, because without the hefty returns that the stock market can provide, it’s very difficult to accrue enough savings to retire comfortably. If Americans are too gun-shy to invest, a retirement crisis could be looming sooner than we think.