Retirement can be a pretty bleak time for people who didn't save enough during their working years. Instead of spending time at the golf course, traveling or playing with their grandchildren, these folks are working part-time jobs, hoping to get by until their next Social Security check shows up in the mail. It's hard to imagine how anyone could live this kind of life, but this seems to be the case for many retirees and possibly many more in the future.
We recently came across a pretty startling study from the Employee Benefit Research Institute (EBRI). According to the group's 2014 Retirement Confidence Survey, 36 percent of workers have less than $1,000 in savings and investments for retirement. It's actually gotten worse over the last year, as the figure was closer to 28 percent in 2013.
Only $1,000 in savings? That amount wouldn't last you a month, let alone 20 or 25 years! According to the study, most of the workers who have so little are are those who do not have access to an employer-sponsored retirement plan like a 401(k). The survey found that workers without a plan were four times as likely to feel unsure about their financial security than individuals who have a workplace plan.
The report, which was based on the responses of 1,000 workers and 500 retirees, also found that 68 percent of households making less than $35,000 a year have less than $1,000 in savings. The folks in the survey who had the highest confidence about their retirement prospects were from higher-income households and had some sort of structured retirement savings plan in place.
Some of the people who have a small amount in savings say that they will make up the difference by simply working past retirement age. But that's much easier said than done, according to Jack VanDerhei, the EBRI's research director.
"There's a difference between what they think is going to happen and what actually happens," VanDerhei told FOX Business. "The number of people planning to work longer has more than tripled in [24 years], but when we ask retirees, 40-50 percent say they retired earlier than expected, and most of the time it was due to a health issue, whether it was them, their spouse or other family member."
About 60 percent of the workers surveyed said that debt was a major obstacle that they were facing. VanDerhei said that they would need to focus on long-term strategies to get their spending and debt levels under control.
You don't have to be tied down to your employer's plan in order to save adequately for retirement. It's possible that residential real estate investing is what you need to do to continue living comfortably.