My colleague recently sent me an article that discusses the financial security, or lack thereof, of Americans. And that’s very troubling. The problems we face today are, indeed, different than yesterday. Take for example the fact we’re living longer, albeit with health issues, such as Alzheimer’s. Or, take America’s Social Security retirement trust funds into consideration. They could be depleted by 2034 if Congress doesn’t act before then.
To put the severity of the situation into better perspective, here are a couple more facts:
- The first wave of baby boomers turned 70 this year
- By 2030, the 65-and-older population is projected to be about 74 million people — more than 50% larger than today — and will represent about 20% of the American population
- About half of households age 55 or older have no retirement savings
- The median amount of savings for half of older households was $104,000, equivalent to an inflation-protected annuity of $310 per month
- Only about 10% of households in this age group have retirement savings of $500,000 or more
Results from a new Wells Fargo study also indicate that Americans aren’t saving enough for retirement and are investing too conservatively.
While it is essential to continue to educate and support the older population, it’s equally important for financial institutions to help our younger generation build enough wealth that can carry them through retirement and any other challenges they may encounter throughout life.
Some companies, like those in FinTech, are already doing this quite well and leading the charge. Other financial services organizations, such as those that have been around for decades, have also taken notice and started to offer solutions (e.g., robo-advisors) that appeal to consumers who prefer a more simple, automated method of investing. Nonetheless, there’s a long way to go to ensure a bright future for our people.
