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Record Savings Retirement

Americans Want a Record High Cushion for Retirement

The retirement age is not a one-size fits all plan as an individual’s decision on when to start receiving benefits varies. The “full” retirement age is 66-67 years of age, depending on when you were born. Starting retirement benefits early, at age 62, gives you less money a month, while starting benefits later, age 70 increases the monthly amount.

 

No matter the age you decide to retire these days, employees have realized they need much more money to have a comfortable retirement cushion than they did just a few years ago. However, while inflation continues to rise, they are a long, long way off from reaching their goal.

 

According to new data this week from Northwestern Mutual, U.S. residents’ “magic number” for retirement has surged to an all-time high—rising much faster than the rate of inflation, which currently hovers just above 3 percent. American adults now believe they will need about $1.46 million to retire comfortably, a 15 percent jump over the $1.27 million reported last year and a whopping 53 percent surge from the $951,000 target they reported in 2020.

 

By generation, both Generation Z and Millennials anticipate to need more than $1.6 million to retire comfortably. High-net-worth individuals—those with more than $1 million in investable assets—said they’ll need nearly $4 million.

 

While workers acknowledge they need a greater amount of money saved, the jump has not encouraged Americans to start saving more. In fact, the amount adults have saved for retirement is actually declining.  $88,400 is the current average Americans have saved up, according to Northwestern Mutual’s survey of 4,588 U.S. adults, which is slightly lower than the $89,300 in 2023 and much lower than the five-year peak of $98,800 in 2021.

 

Baby Boomers on average have $120,300 saved for retirement, Gen X employees have about $108,600 saved, Millennials have $62,600 and Gen Z has $22,800. Meaning there is a $1.37 million gap between the average employee’s retirement goal and current savings.

 

“People’s magic number to retire comfortably has exploded to an all-time high, and the gap between their goals and progress has never been wider,” said Aditi Javeri Gokhale, chief strategy officer, president of retail investments and head of institutional investments at Northwestern Mutual. “Inflation is expanding our expectations for retirement savings.”

 

Record Savings Retirement Disability

Social Security Disability Insurance For Workers

Unfortunately, thousands of young people are unexpectedly seriously injured, or have serious medical conditions, such as cancer or mental illness. In fact, more than 1-in-4 20-year-olds becomes disabled before reaching retirement age.  Social Security Disability Insurance (SSDI) is an insurance program under which workers earn coverage for benefits, by working and paying Social Security taxes on their earnings. This insurance provides income and benefits to disabled workers and to their dependents, for those who can no longer work due to a disability.

 

Many Americans may receive income from a private disability income insurance plan prior to becoming eligible for Social Security disability benefits. These plans can be purchased individually but are often provided or facilitated by employers.

 

Disability affects earnings, total family income and the ability to pay for things like food and housing. Medical expenses associated with the health issue are to be expected, as well as a reduced income from the inability to work. Now that you cannot count on a paycheck from work, your retirement savings could also be affected, and that money will have less time to grow.

 

It can be helpful to know what situations you may face as you plan for retirement due to disability and the associated expenses and accommodations that you may incur. Examples include paying for a delivery service if in-person pickup is not an option, or a more expensive car to accommodate a wheelchair, or food for a special diet. Accessible housing may also be more expensive.

 

People that become disabled typically miss their normal routine of a job and want to re-enter the workforce, however, are afraid they will lose disability benefits if they try to get a job. If you are age 18 through 64 and receive Social Security disability benefits, you can participate in Social Security’s Ticket to Work program. The program allows you to obtain free employment support services and take advantage of work incentives that make it easier to work, while still receiving benefits such as health care. You can receive cash benefits from Social Security in some instances, and you are protected if you have to stop working due to your disability. Learn about the Ticket to Work program or call 1-866-968-7842 or 1-866-833-2967 (TTY).

 

Contact Lowery Law Group at info@lowerylegal.com or call (843) 991-0733. There is no fee for a free consultation regarding your claim. Lowery Law Group is experienced in handling cases in South Carolina as well as Georgia.