Source: Wall Street Journal | Date: March 19, 2013
Workers and employers in
the U.S. are bracing for a retirement crisis, even as the stock market sits
near highs and the economy shows signs of improvement.
New data show that
powerful financial and demographic forces are combining to squeeze individuals
and companies that are trying to save for the future and make their money last.
Fifty-seven percent of
U.S. workers surveyed reported less than $25,000 in total household savings and
investments excluding their homes, according to a report to be released Tuesday
by the Employee Benefit Research Institute. Only 49% reported having so little
money saved in 2008.
The survey also found
that 28% of Americans have no confidence they will have enough money to retire
comfortably—the highest level in the study's 23-year history.
The same forces are
weighing on corporate balance sheets. Based on another recent report, the
Society of Actuaries said that rising life expectancies could add as much as
$97 billion to corporate pension liabilities in coming years, an increase of up
to 5%.
While Americans are
living longer, the extended life spans will make it tougher for workers trying
to stretch retirement savings and put additional strains on pension plans.
Scott
Ghelfi, 49 years old, a small-business owner in Falmouth, Mass., and his wife
own two candy stores and a children's clothing shop. He said they didn't make
their normal $24,000 contribution to their retirement plan two years ago
because they couldn't afford to take the money out of the businesses.
To read more of this article click here.