While Americans are living longer and healthier lives, they also are facing more financially fragile situations. Uncertainty related to financial health in the later years of life has become more common. Lower, less predictable incomes among those retiring within 10 years has resulted in difficulty paying their bills. This group also reports a lower net worth. In 2013, the typical 56- to 61-year-old had an average of $17,000 in retirement savings. This lower level of net worth is partially the result of higher levels of debt than the previous generation. This debt is in the form of higher mortgages and education loans, including amounts owed for their children’s education.
To address these concerns, several policy actions are proposed:
- Requiring and supporting strategies for to build effective financial capability, including coaching and workforce development programs.
- Tax policies and other incentives that encourage savings and investment among lower-income and lower-wealth families.
- Policies to increase educational opportunities without excessive debt.
- Efforts for protection from financial difficulties caused by medical catastrophe.
- Policies for improved housing stability of both owners and renters.
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- Have students interview people to determine common actions used to save for retirement.
- Have students create a presentation to suggest action for improved financial security for various income levels.
- What are some financial pressures faced by households as people approach retirement age?
- What actions might government and business take to reduce the financial pressures of people approaching retirement age?