Amid economic downturn retirees remain optimistic
Seniors are more prepared for economy woes than expected
RAPID CITY, S.D. (KOTA) - Between hiring slows and cost of living increases, inflation is hitting the US economy hard. But, according to a survey conducted by American century investments, compared to two years ago, retirees don’t see the current situation as a problem for their long-term prosperity. We talked to some retirees at the Canyon Lake activity senior center to find out how they’re handling the bears and bulls of the current market.
Despite inflation and an unsteady economy, workers and retirees are content in their retirement, such as Clyde Lichtenecker, a retiree says, “Yes we’ve seen some inflation set in but we, in our work history, was able to put away some money for our retirement.” And Karen Mcgregor, another Canyon Lake retiree says, “My husband retired last year, I retired 5 years ago and we are pretty optimistic. we planned ahead and we were able to pay off our house before we retired so that helps a lot.”
A new study by American Century Investments says Americans are more optimistic about retirement than they were two years ago. Glenn Dial, a senior retirement strategist with American Century Investments says, “It’s somewhat counterintuitive, part of that rationale actually goes back to a law that was passed in 2006 that allowed employers to automatically enroll their employees in a 401k program that automatically increase their savings rates and to automatically default them into an investment
Dial says retirees are also confident because of the way they saved, “people were in plans, saving, they were saving more, and even during a market downturn, they stayed in the 401k and all these automatic features that were passed into law a lot of American workers are now in 401 k plans with significant balances and are feeling fairly optimistic”
While most seniors we interviewed at canyon lake activity center were confident about their retirement, some were still concerned about interest rates and inflation. Rolla Marsh says, “My retirement has been pleasant but down the road 20 years from now I see problems for me because I can run out of money and inflation will eat up the social security so I’m a little worried cause if I hit 90 how I’m gonna work.”
Like Marsh, longevity tends to bother Americans more than anything but there’s some help on the way. Dial adds, “Just a couple years ago new laws were passed that offered employers to offer these types of benefits that protect your income against market losses and protect against longevity risks, in other words, you will get that guaranteed income all your life even if you live to 106 or 130. Later this year or next employers are going to start adopting these provisions or products that will completely change the 401k space savings retirement plan and will be a game changer.”
According to the Congressional Budget Office Americans, 65 and older are expected to grow faster over the next 30 years, and by 2060 nearly a quarter of all Americans will be of retirement age.
Click on the video above to see the full story.
Copyright 2023 KOTA. All rights reserved.