Today's Boomer Magazine Fall 2022 Vol.10 No.2

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America’s $7 Trillion Retirement Crisis Is Only Getting Worse Economic turmoil took a toll on savings in the first half of 2022 and that’s just the tip of the iceberg as many in the US lack employersponsored plans. By Suzanne Woolley, Bloomberg

Americans have been warned for years of an impending retirement crisis. Yet the situation is getting worse.

portion of the population who are in retirement — that's the concern,” said Richard Johnson, a retirement expert at the Urban Institute. “For people who are not in that age group, it's still concerning because it could strain the social safety net.”

In 2019, Boston College estimated there was a $7.1 Even when everything was going right — inflation trillion retirement-savings shortfall among American was nonexistent, interest rates were low and stocks households, with half of them facing a lower were in an extended bull market — there was a multi standard of living once they stop working. That -trillion dollar savings shortfall. number likely hasn’t changed much since then, Then came a pandemic, war in Europe, decadesdespite the increase in stock and housing prices over high inflation, the fastest rate-hiking cycle since the the last three years, according to Munnell. early 1980s and fears of a recession. The resulting market turmoil erased some $3.4 trillion from 401(k) s and IRAs in the first half of 2022, according to Alicia Munnell, director of Boston College’s Center for Retirement Research. And that’s just for the people who have retirement accounts. About half of private-sector workers don’t have an employer-sponsored retirement plan, and many of those who do end up saving very little. It’s a problem that isn’t easily fixed, and contributes to the sense that the American Dream is in decline. And while surging inflation and volatile markets are bad news for people in or nearing retirement, the picture may be even worse for young Americans who are priced out of the housing market, struggling to build wealth and buried under mountains of student-loan debt. “Living standards are going to decline for a large

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“The people who profited from that were people who weren’t at risk in the first place,” she said. Top Retirement Worries Millions of Americans face the reality of spending their senior years in straitened circumstances, struggling to make ends meet. So how did one of the