Leslie Lynch, 52, of Glastonbury, Conn., had $30,000 in her 401(k) retirement account when she lost her $65,000-a-year job last year at an insurance company. She’d worked there 28 years. She’s depleted her retirement savings trying to stay afloat.
“I don’t believe that I will ever retire now,” she says.
Many of those facing a financial squeeze in retirement can look to themselves for part of the blame. They spent many years before the Great Recession borrowing and spending instead of saving.
The National Institute on Retirement Security estimates that Americans are at least $6.8 trillion short of what they need to have saved for a comfortable retirement. For those 55 to 64, the shortfall comes to $113,000 per household.
In Asia, workers are facing a different retirement worry, a byproduct of their astonishing economic growth.
Traditionally, Chinese and Koreans could expect their grown children to care for them as they aged. But newly prosperous young people increasingly want to live on their own. They also are more likely to move to distant cities to take jobs, leaving parents behind. Countries like China and South Korea are at an “awkward” stage, Jackson says: The old ways are vanishing, but new systems of caring for the aged aren’t yet in place.
Yoo Tae-we, 47, a South Korean manager at a trading company that imports semiconductor components, doesn’t expect his son to support him as he and his siblings did their parents.
“We have to prepare for our own futures rather than depending on our children,” he says.
China pays generous pensions to civil servants and urban workers. They can retire early with full benefits — at 60 for men and 50 or 55 for women. Their pensions will prove to be a burden as China ages and each retiree is supported by contributions from fewer workers.