"The full retirement age, which has gradually increased, is now steady at 67. The big picture: Retirees on fixed incomes face an ever-rising cost of living. Out-of-pocket medical expenses are escalating, the cost of in-home care is growing more than three times faster than inflation, and an increasing share of the elderly are spending more than a third of their income on real estate too."
"Pensions once provided retirees with a regular, expected source of income for as long as they lived. They were a boon for the Silent Generation and older boomers. Now they are vanishing. "We kind of took care of the Greatest Generation," Teresa Ghilarducci, an economist at the New School for Social Research and leading retirement researcher, tells Axios. But the younger generations have had much less support."
"But the younger generations have had much less support. On paper, retirement accounts might make older Americans appear wealthy. There are an increasing number of 401(k) millionaires, after all. But with costs and debts rising - and lifespans lengthening - older Americans might run out of money, she says, or be forced to severely cut back spending. "We have shades of the retirement crisis right now.""
About 45% of Americans will face retirement-funding shortfalls if they retire at 65, while the full retirement age is now 67. Retirees on fixed incomes confront rising costs, escalating out-of-pocket medical expenses, and in-home care costs growing over three times faster than inflation. An increasing share of the elderly spends more than a third of income on real estate. Traditional defined-benefit pensions are disappearing, reducing guaranteed lifetime income. On-paper retirement account balances can mask liquidity and longevity risks. Retirement readiness is highly unequal, with high earners contributing far more, and Social Security's future adequacy remains uncertain.
Read at Axios
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