new york
CNN
—
Eric Payne, a 37-year-old single father of two boys, works hard to increase his weekly paycheck. He calls this “clicking.”
He earns a good salary in the $80,000 range, but by the time all his necessary expenses are covered, he has little to no spare time.
“Clicks are for day-to-day operations,” said Payne, who works as a quality assurance manager for a seafood wholesaler near Portland, Maine.
“Think of ways to cover groceries, car payments, mortgage, children’s clothes, child care, or unexpected bills.”
click. click. click. click. click. click.
“My financial focus has to be on the present because every penny matters,” he told CNN. “But I am fully aware that I will be creating other problems for myself in the future.”
For now, his Retirement plans are put on the back burner.
He says it’s impossible to budget for the future. “I think it’s a constant battle and it feels like you’re always getting your kicks. I think I manage to deal with it, but then something else comes along that I have to deal with.”
Between my 401(k) at my previous job and my current company’s employee stock ownership plan, I have less than $10,000 saved up for retirement.
But he says he has no plans to stop working at age 65 and will have to continue earning as much as his health allows.
Payne is not alone.
The number of U.S. workers age 75 and older entering the labor market is expected to nearly double over the next decade, creating an impending retirement crisis.
Saving for retirement has long been viewed as a three-legged chair in the United States. Americans had pension plans, Social Security benefits, and defined contribution plans like 401(k)s. No more.
Pension systems have almost disappeared. In the mid-1980s, about half of private sector workers were covered by so-called defined benefit plans, but by 2022, only 15% of private sector workers had them.
Social Security payments will continue to be provided Approximately 90% of income According to a survey by the Social Security Administration, more than a quarter of seniors. But the Social Security Trust Fund faces a 75-year deficit and will be bankrupt without intervention. it will run out This means that only a portion of the benefits expected by the retiree are paid. Lawmakers have faced a decades-long political impasse over how to resolve it.
What remains is a 401(k), which 68% of private industry workers have access to but only 50% use.
Larry Fink, CEO of BlackRock, warned in his book: annual investor letter Last week, he said that unless business leaders and politicians engage in a “systematic, high-level effort” to rethink retirement in the United States, they risk turning younger generations away from capitalism and politics.
“No wonder younger generations, Millennials and Gen Z, are financially insecure,” he wrote. “They believe that my generation, the baby boomers, are so focused on their own financial well-being to the detriment of those who come next. And in the case of retirement, they’re right.”
Fink suggested raising the projected retirement age beyond 65 and said increasing access to investments and 401(k) plans could help solve the problem.
It would also help Fink, More than half of the $10 trillion in assets managed by BlackRock is subject to retirement.
But for many Americans, saving for retirement is a distant idea, with only 44% of American adults able to afford insurance. emergency expenses More than $1,000 of their savings will be paid out, according to Bankrate data.
High inflation, student loan payments resume, economic collapse Pandemic-era savings mean more Americans are strapped for cash.
Research shows that many people prematurely tap into their 401(k) accounts due to financial hardship, and end up paying hefty fines for doing so. Recent Vanguard research.
Jamie is a 54-year-old single mother who works as a legal administrative assistant in Central Texas. There were many times when she had to rely on her 401(k) retirement funds to support herself and her son.
The first time was right after I gave birth to my son. Jamie had a job with no maternity leave policy. The day she returned home from her hospital, she received a letter from her employer informing her that she would not have her job secured during her scheduled vacation period.
“I wasn’t working and his father wasn’t around so I couldn’t help. “It was my first time stepping into a 401(k),” she said.
A few years later, she re-entered between jobs. She needed the money to cover expenses, finance a move and pay off credit card debt, she said.
Jamie, who spoke to CNN on condition that her last name not be used, is still living off her paycheck and has about $15,000 left in her 401(k).
“That’s all I have,” she said. “I mean, that’s not enough. But there’s nothing I can do for now.”
Americans head to the polls this November with the retirement crisis in mind.
former president donald trump was suggested on CNBC Last month, he said he was open to cuts to Social Security and Medicare.
“There’s a lot that can be done about the reduction of rights, and even the theft and mismanagement of rights,” Trump said.
After the interview, President Joe Biden responded to a clip made by the Trump campaign of excerpts of Trump’s comments, saying, “I don’t monitor it.”
Trump campaign spokeswoman Caroline Leavitt later told CNN that the president was “clearly talking about reducing waste, not rights.”
The Biden administration signed it in December 2022. Secure 2.0 It encourages employers to offer retirement plans to their employees and removes some of the barriers to saving.Late last year, the administration proposed the following rules Limit junk charges In investing for retirement.
Meanwhile, Vermont Independent Sen. Bernie Sanders sounded the alarm on retirement last month when he chaired a hearing on the status of his retirement. Approximately one-quarter of elderly people Live on less than $15,000 per yearSanders pointed out.
The former presidential candidate argued that companies should reinstate their pension plans, a notable difference from the investment programs BlackRock’s Fink advocated in his letter.
Voters are paying attention to these differences.
Beth, 60 year old administrative assistant Pittsburgh told CNN he pays close attention to what each candidate, from presidential candidates to dogcatchers, say about retirement.
She has about $360,000 saved in her 401(k), which she knows is better than average. Still, she says, “I have no illusions that it will be enough.”
Beth, who asked that her last name not be used, also told CNN that she plans to work until at least 65 to qualify for Medicare, but added, “Are you kidding me?” I’ll work,” he said.
She has yet to find a political candidate with an attractive retirement plan.
“I hope things get better, but I don’t know what will happen at this point,” she said. “I definitely don’t want it to get any worse.”
