EVERYONE knows that the baby-boomer generation is in the process of retiring, and that all those ex-hippies and punks can expect to live longer than the Americans who retired before them. But the financial challenge this poses is less well understood. Any lingering complacency ought to be exploded by two papers in the latest Journal of Retirement.
The first*, from the Centre for Retirement Research (CRR) at Boston College, estimates the proportion of 65-year-olds who will be able to retire without a big hit to their disposable income. Pensioners do not usually need as much money coming in as workers: for a start, they no longer need to save for retirement. The CRR estimates that 65-85% of their previous income is a reasonable “replacement rate”, depending on the type of household.
As well as private pensions, elderly Americans receive income from the federal government (in the form of Social Security, the public pension) and many earn money from their accumulated wealth, particularly by taking equity out of their houses. Even allowing for these sources of income, the CRR estimates that 52% of Americans may not...Continue reading
from Economics http://ift.tt/1Q71fJh
via IFTTT
No comments:
Post a Comment