Retirement

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The retirement crisis is here

Illustration: Sarah Grillo/Axios

A silver tsunami is washing across our shores, as record numbers of Americans start hitting retirement age, writes Axios' Emily Peck. The U.S. isn't ready. Why it matters: Older Americans are stepping into an unfamiliar, less secure version of retirement. ? About 45% of Americans will experience retirement funding shortfalls if they retire at 65, per Morningstar. 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. ? "We kind of took care of the Greatest Generation" in terms of broad planning for a structured retirement, 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. ? Reality check: Experts have been warning about a retirement crisis for decades, and we have yet to see one, American Enterprise Institute economist Andrew Biggs tells Axios. "The real retirement crisis is on the governmental side," he says, pointing to the Social Security funding gap. Go deeper.

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Chart: How many retirees there will be

Data: U.S. Census Bureau. Chart: Axios Visuals More than 20% of the U.S. population will be 65 or older by 2030 — over 71 million people. By 2100, 106 million people, nearly 30% of the U.S. population, will be over 65.

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How to save (for) your retirement

Illustration: Sarah Grillo/Axios

Retirement seems scariest before you take the leap, experts say. But there are things workers can do now to prepare and feel less anxious, Emily Peck reports. ? Take a look at the numbers. Make a budget and figure out what you need. Take everything into account — not just your retirement account, but housing wealth too, if you have it. ? Save money. It's obvious but worth repeating. Take advantage of those 401(k)s and any kind of employer match. If you're older and need to catch up, increase your contribution if you can. If you don't have a workplace plan, you can set up a plan for yourself. There are options like a SEP-IRA or solo 401(k), says Diane Harris, deputy editor of Kiplinger Personal Finance magazine. ? Prioritize paying down high-interest debt. This is especially important for young workers. ? Take care of yourself. Medical expenses are one of the biggest expenses in retirement. ⌚️ Delay. Most experts say to keep working if you can. When you continue your job past full retirement age, your Social Security benefit increases by about 7% annually when you do retire. The annual increase stops at age 70. The bottom line: Money's important. But well-being isn't all about money. Go deeper.