Retirement in America increasingly means working well into old age, with many seniors unable to support themselves solely on Social Security and savings. Teresa Ghilarducci, a renowned retirement expert, sheds light on this growing crisis.
Retirement in America and the system’s shortcomings
In a conversation with CBS MoneyWatch about her new book, “Work, Retire, Repeat: The Uncertainty of Retirement in the New Economy,” Ghilarducci explains how the nation’s retirement system fails most workers. A labor economist and professor at The New School for Social Research in New York, she calls for a “bold plan” to address this issue, dubbing it the “Gray New Deal” in homage to the Depression-era New Deal.
Ghilarducci’s research reveals a startling reality: only 10% of Americans aged 62 to 70 are both retired and financially secure. Most either live below their pre-retirement standard of living or continue working because they can’t afford to retire. Her findings, based on data from the University of Michigan’s Health and Retirement Survey, highlight a pressing need for systemic change.
Happy retirement in America is elusive
Allan Fawcett, now 67, enjoys a blissful retirement in Spain, a stark contrast to what he believes would have been possible in the U.S. Residing in Barcelona with his working wife, Fawcett spends his days playing tennis, reading, and socializing at beach cafés. The couple plans to travel around Europe, including a trip to Paris for the Olympics.
Fawcett praises the affordability of housing, food, and wine in Spain, the convenience of the mass transit system, and the walkability of cities. “It’s a good life here,” he says, reveling in the outdoor dining, pleasant weather, and low cost of living.
Fawcett’s story is part of a growing trend of retirees moving abroad, driven by the retirement crisis in the U.S.
The stark reality of retirement savings
The bleak state of retirement savings in America is no surprise: approximately 30% of Americans aged 59 or older have no retirement savings. Some policymakers suggest extending working lives as a solution, citing longer life expectancies. Republican lawmakers have proposed raising the retirement age for Social Security to 70, up from about 67.
There’s a belief among younger workers that they can work into their late 60s or beyond. However, the average retirement age remains 62, with many older adults leaving the workforce unwillingly due to layoffs or health issues.
“We found that most people who are retired didn’t retire when they wanted to, but because they were forced out,” Ghilarducci says. “Even though we have this idea that people could just decide to work a little bit longer, it probably isn’t their choice.”
Is the ‘Gray New Deal’ possible?
The future of retirement in America is fraught with uncertainty, as many seniors find themselves working longer than they had planned. Ghilarducci’s call for a “Gray New Deal” underscores the urgent need for comprehensive reforms to secure a stable and dignified retirement for all Americans. As more retirees look abroad for a better quality of life, it becomes clear that the current system is not meeting the needs of the majority.
Sources:
Boomers are leaving America to retire abroad in droves because the U.S. is just too expensive
Retiring in America increasingly means working into old age, new book finds
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