Americans May Run Out Of Money In Retirement Thanks To Longer Lifespans and High Inflation | Global News Avenue

Americans face longer retirements and higher prices, and their savings may not be as good as they want.

Not only do people live longer, but sometimes Forced to retire More than they expected. Stubborn inflation Can eat further Retirement incomemaking retirees less money than expected.

A new study by investment firm Dunham & Associates shows that if retirement extends to 50 years, a retired couple will spend only $2.7 million to buy food. this Average retirement account balance For Americans aged 55 to 64, it will be $537,560 in 2022.

According to the Centers for Disease Control and Prevention, the current life expectancy in the United States is 77.5 According to the 2024 mass interaction survey, the average retirement age is 62 years old.

“Medical advances are unprecedented, without the longevity of imagination, but at the same time, sustained inflation will threaten longer Americans may be able to enjoy,” said Dunham executive vice president Salvatore Capizzi. Purchasing power during retirement.”

Why your retirement savings may not be enough

As you approach retirement, traditional wisdom shows that you tend toward a more conservative fixed income asset than stocks reduce risk and earn guaranteed income. However, as inflation erodes its purchasing power, the advice could “systemically undermine the financial security of retirees.”

“Only 2% inflation, traditionally ‘conservative’ portfolio produces a net return of 4%-5% that could be exhausted from 10 to 20 years before the end of a 50-year retirement, with the aim of keeping your clients in the last few There are no resources for a decade,” Dunham study found.

Many retirees want to rely on social security benefits, which may not help, and it may also be Cut by 24% by 2034 If Congress does not intervene to pay the funds.

According to Dunham, the increase in lifespan also leads retirees or those at the forefront of retirement support for the elderly. Many Genxers or Genxers born between 1965 and 1980 Financial support for families Members, saving for retirement is even more challenging.

Can you fix your portfolio?

To keep up with inflation and life expectancy, workers can create a portfolio that is 4% to 5% higher than inflation.

Instead of using tradition bucket Dunham Research suggests that the way to separate assets into when to use it, adopting a “purpose-based portfolio strategy” could create a more sustainable portfolio. This strategy divides assets into categories: distributebend, health care and heritage.

“The retirement gap should be determined,” said Kassi Fetters, a certified financial planner.