A sobering survey from our friends at Wells Fargo:
The concept of a “retirement age” is going the way of the typewriter..
• A quarter (25%) of middle class Americans say they will “need to work until at least age 80” to live comfortably in retirement
• Three-fourths (74%) of middle class Americans expect to work in their retirement years, including 39% of all respondents who will need to work to make ends meet or maintain their lifestyles, while 35% say they will work because they want to, rather than out of financial need.
• Among middle class Americans age 40 to 59, 54% say they will “need to work,” compared to 34% of those age 25 to 39. Accordingly, only 25% of those between the ages of 40 and 59 say they will work in retirement because they “want to,” versus 45% of Americans between the ages of 25 and 39. ...
This new reality isn't hard to believe, especially after you dive into a new Stanford Study on our shrinking Middle Class.
... In 2007, the last year captured by the data, 44 percent of families lived in neighborhoods the study defined as middle-income, down from 65 percent of families in 1970. At the same time, a third of American families lived in areas of either affluence or poverty, up from just 15 percent of families in 1970. ...
None of this should be a surprise to anyone paying attention. We live in a different universe than we did four decades ago.
Then, we had a large manufacturing base, robustly funded schools, a more progressive tax code. America was still the dominant manufacturer in the world, with the rest of the globe straining to catch up. We were the dominant, post-World War power because we were large, untouched by the war, and had a vibrant manufacturing base with a huge advantage because our competitors had been bombed to rubble.
Now, other countries have not only caught us, some are close to lapping us. Not pretty.
I'm not one of those who think we're necessarily doomed to heartache and failure. Sixty years on, the big advantages are gone, so we'll need to shore up our sagging educational system and play to our strengths. (High productivity and workplace flexibility high among them.) Nationally, we need to make smart choices as we chug into the future.
And the lessons to be learned in the here and now? Nothing that happens to us on an individual level can be separated from the larger, economic context. If we don't have a high-level education, we tend to be screwed. If we don't work in an industry with decent wages and benefits, we have fewer decent, day-to-day life choices. (Nice house, nice neighborhood, top-flight schools for the kids.)
And if we don't live below our means and save for retirement, we will likely have a less than optimum life-style during the final decades of our lives, and end up working until the Reaper waves us home.