Time magazine has caused a media stir this week after identifying 2030 as the “Retirement Apocalypse.”
The article was made some shocking claims stating that by 2030 Americans can expect Social Security to be nearly diminished by our beloved baby boomer generation. Not only will baby boomers have graduated to retirees, but we should also be concerned that the up and coming Generation X-ers will begin seeing retirement on their horizon.
The generation X-ers will approach retirement expecting to tap into the infinite Social Security trust fund just as their parents have done. This generation is accustomed to working hard at the small and mid-size companies that have generated the majority of our American economy’s new jobs over the past 50 years. The catch is that only 15% of these firms offer formal retirement plans.
Not to mention that most of the individuals working at small and mid-size firms are members of the middle class –the economic group that took the biggest financial hit during the 2008 recession. When you also account for the stagnation we have witnessed in average real wages over the past three decades that continues to remain immobile despite an increase in living costs, retirement starts to look pretty dismal.
At this rate, Generaton X-ers will approach retirement with minimal savings. A depleted social security trust fund won’t leave them with much financial security. So how much is minimal savings? Although we can’t provide exact numbers, Time noted that Generation X-ers can certainly expect to have less than the $42K that today’s average worker retires with.
But it’s not as bad as you think. Yes, we expect a near depletion of Social Security in 2033, but even then Social Security is still expected to offer 77% of benefits. And we can safely say that politicians wouldn’t let one of the government’s most successful and effective programs run out without finding extra revenue.
However, even if Social Security were sustained, the benefits continue to cover a bare minimum of necessities for today’s retirees. This is why alternatives and solutions need to be made now so that future generations are better equipped for retirement.
Although Bloomberg criticized Time’s article for using fear tactics to shock America into action, the discussions generated by this activity have shown that there is clearly a problem with leaving people on their own to manage their retirement savings. A reverse mortgage is the solution that could help you, your parents, and your friends plan for retirement. When you call one of our licensed experts at One Reverse Mortgage you will be asked to identify your retirement goals. This allows our licensed experts to understand your situation so that they can provide you with a realistic estimate of the money you can expect to receive from the program as well as which loan option will be the best way to receive your funds.
Creating a sense of urgency for retirement savings
In Time’s article on the retirement apocalypse, Rana Foroohar explains that “it’s difficult to create a sense of urgency over retirement security.” However, at One Reverse Mortgage it is engraved in our culture to respond with a sense of urgency. It’s part of our culture and our mission statement as a Quicken Loans company.
Right now, it is almost certain that the next generation of retirees will be working longer. While this could be due to financial reasons it also has a lot to do with our improved health and choice of professions. Many of today’s occupations are less physically demanding than the professions of our grandparents. But with longer careers we should see an increase in savings as well as more seniors remaining in their homes.
A reverse mortgage loan can help
A reverse mortgage is the retirement alternative that can help you remain in your home throughout your retirement while also providing you with an emergency savings fund or the relief that comes with eliminating your monthly mortgage payment*. A reverse mortgage loan is a financial tool that allows homeowners 62 and over to access the stored equity in their home, then use this equity for whatever it is that will make their retirement more comfortable.
Retirement still has the opportunity to be rewarding. Call a One Reverse Mortgage licensed expert to begin establishing a retirement savings plan and see how a reverse mortgage loan can help you accomplish your retirement dreams.
*Homeowner is still responsible for taxes, insurance, and property maintenance.