A startling number of young adults don't have enough in retirement savings to buy a cup of coffee. That's the gist of a worrying new survey, which finds that nearly half of Americans ages 18 to 29 have saved absolutely nothing for their post-professional years. The problem isn't unique to young people. Half of Americans 55 and older haven't socked away anything either.
Such meager savings would be troubling under the best of circumstances. But at a time of low interest rates, longer life spans and faltering safety-net programs, Americans are even less financially prepared for retirement than they realize. A majority of workers have less than $10,000 in savings. Of the Americans between 55 and 64 years of age who have saved anything, the median retirement account balance is just over $100,000. What's less well known is just how expensive retirement has become—especially now that Americans are living longer and healthcare costs are rising. Today, a one-bedroom unit in an assisted living facility can easily cost $100,000 per year.
It gets worse. Thanks to the low-interest rate environment, Americans have to save more money now than they did just a few years ago to secure the same level of retirement income. To take one sobering example, for today's 65-year-olds, generating $50,000 in annual income for the next 30 years requires about $1.5 million in savings. That’s $200,000 more than an individual would have needed just five years ago.
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