Retirement & Debt

Saving for retirement is essential for anyone who wants to be financially secure and maintain a comfortable standard of living after they stop working. Americans are living longer, and that requires us to set aside more money if we want to ensure we won't outlive our assets. Even with loans and other debts, it's not impossible.

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Americans Turning 65 Each Day

10,000

Americans Who Save for Retirement

49%

Population 65+ Living in Poverty

9%

Retirement Accounts

Retirement accounts like 401(k)s and IRAs can help you save painlessly for decades leading up to retirement. Saving at an early age means greater tax-free earnings today and a larger nest egg for tomorrow. Pensions and Social Security compensation can also play a role but won’t cover all of your expenses. Learn about the different types of retirement accounts.

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Saving for Retirement

Most Americans are dangerously unprepared for the financial side of retirement. In general, retirees need 80 percent of their pre-retirement salary for each year of retirement. You should aim to put even a small bit of money into a retirement account each month to meet your retirement needs. Learn how and when to save for retirement.

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Retirement & Debt

It's best to resolve debts before retirement so old balances don't eat up precious income. One of the reasons you want to shed your credit card debt, mortgages and other personal debts now is because you don't want to take them into retirement. You may face new debts during your golden years. Learn more about avoiding debt during retirement.

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Social Security and Pensions

Social Security makes up 39 percent of the income of elderly Americans, with 90 percent of people 65 and older receiving benefits. It is the only source of income for some, but for most people Social Security doesn’t pay all the bills. Additionally, pension plans cover significantly fewer people these days. Once considered the norm, pension plans are now in place for only 20 percent of those in the private sector workforce. In 2010, 43 percent of workers and retirees 60 years or older received money from a pension. This number was at a meager 15 percent for people who worked in the private sector.

Seniors and Savings

A comfortable retirement requires years of planning and decades of saving up money. Some people don’t think ahead or don’t have the funds for retirement, with only 14 percent of Americans stating they are confident in their retirement savings plans. This drastically affects quality of life during retirement, and leaves seniors financially vulnerable during a time of life when they would like to be secure.

Bill Fay

Author

Bill Fay

Bill Fay is a journalism veteran with a nearly four-decade career in reporting and writing for daily newspapers, magazines and public officials. His focus at Debt.org is on frugal living, veterans' finances, retirement and tax advice. Bill can be reached at bfay@debt.org.

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