"Despite Boom, Future Retirees Worse Off "

From: Tibor Bode


This article appeared on The Motley Fool's Your Money section. Albeit it is specific to the US, there is also some relevance to Oz.

"Despite Boom, Future Retirees Worse Off
You'd think that the extended bull market of the '80s and '90s would provide future retirees the most resplendent golden years in the history of society-sanctioned loafing. Makes sense... but it's not true.

According to the report, Retirement Insecurity: The Income Shortfalls Awaiting the Soon-to-Retire, the prospects of households headed by someone between the ages of 47 and 64 are dimmer than those of previous retirees. The study, written by NYU professor Edward N. Wolff and published by the Economic Policy Institute, provided some startling statistics:

From 1989 to 1998, the percentage of near-retirees who will not be able to replace half of their pre-retirement income rose from 29.9% to 42.5%.

Almost one-fifth (18.5%) will live below the poverty level, up from 17.2% in 1989.

Retirement wealth declined 11% from 1983 to 1998 for households at the median.
The news isn't all bad -- if you're worth more than a million bucks. For households with a net worth of $1 million or more, retirement wealth increased. Everyone else saw a decrease compared to similar folks in 1983.

There are several possible reasons for this decline in retirement security: the demise of defined benefit plans (i.e., traditional pensions), lack of employee education, and low savings rates, among others."

Tibor
 
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