8 Reasons Your Parents Had an Easier Retirement Than You Will

Regardless of how old you are now, you’ll probably have a harder time pulling off a financially secure retirement than your parents did.

A great many of us haven’t planned and saved well. Besides that, fundamental changes in American life make it harder for today’s generations to achieve a comfortable life after work.

Here are eight reasons why the last decades of life are harder now — and some things you can do to bolster your own retirement.

1. We’re living longer

In 1935, the average 65-year-old could expect to live 12 more years. Today, the Social Security Administration says, the average person at age 65 can expect to live two more decades.

Living that long without working takes a lot more money.

Tip: Find a trusted adviser. A fee-only Certified Financial Planner — preferably someone recommended by a friend or family member — can help you plan for retirement and make the most of your resources. Take time to find someone superb.

2. Seniors can’t shake the recession

The Great Recession that ended a decade ago robbed workers of earning power. It hit men and women in their 50s and early 60s especially hard. Home values and investment savings also plummeted.

Some people are still digging out from that hole.

Tip: Don’t wait, take action. If you are still recovering from the last economic downturn, don’t let pride prevent you from getting help. And don’t spend retirement savings or home equity trying to repay unmanageable debt.

You can seek help by talking with a credit counselor through the nonprofit National Foundation for Credit Counseling, or a bankruptcy attorney through the National Association of Consumer Bankruptcy Attorneys.

Money Talks News can also guide you to the help you need. Visit our Solutions Center to discover sources of free debt help.

3. Private pensions are nearly extinct

Only a few decades ago, many large employers offered “defined-benefit” pensions that guaranteed retirees and their spouses a fixed monthly payment for life. But times have changed, and traditional pensions are going the way of the dinosaurs.

Tip: Save more. Without a pension, you simply need to save more for retirement. Follow the basic rules for retirement savings, including minimizing your taxes and expenses, working longer, investing regularly and keeping on top of your investments.

4. Social Security is still under pressure

Unless Congress acts, Social Security Trust Fund reserves are expected to run out in 2034, according to the Social Security Administration. Costs are outpacing revenues due to a rapidly aging population as baby boomers enter retirement and smaller generations enter employment.

Even if lawmakers address the broader issues, the amount you receive might depend in part on when you start claiming it.

Tip: Be strategic about claiming Social Security. Most people claim their Social Security benefits at age 62, which is as soon as they can. But that is not always the best strategy.

Want to get a larger monthly check? Read “14 Ways to Get Bigger Checks From Social Security.”

5. Interest rates are low

Retirees in previous generations earned higher interest on their savings and low-risk investments. But interest rates now are near historic lows. That means many of today’s retirees must take on riskier investments to generate income.

Tip: Don’t dip into retirement savings. Lower interest rates mean your savings may disappear more quickly as you spend. But no matter how tight things get, shun the temptation to borrow from your retirement savings. Don’t do it for any reason, not even to pay off debt.

And don’t settle for low returns. You can find a better savings rate in our Solutions Center.

6. Seniors have more debt

Earlier generations endeavored to enter retirement with a paid-off home and no debts. That’s harder to do today.

Tip: Get help. Debt won’t go away on its own. Check our Solutions Center for more help getting out of credit card debt.

7. Folks might have to retire sooner than they hoped

Many workers today are counting on working into their late 60s and early 70s. But poor health, a job loss or the need to care for loved ones can force people to retire before then.

Tip: Let the kids fend for themselves. Unemployment and low wages have made it hard for many young adults to launch their independent lives. But funding an adult child’s lifestyle can doom your own retirement.

So, put your retirement savings ahead of paying for your children’s college. The kids have more time than you do to make up financial losses.

8. More seniors are single

About 12 million adults age 65 and older live alone, according to Pew Research Center.

Many find freedom in being single, but it can be difficult for one person to support a household financially.

Tip: Don’t touch home equity. If your retirement is looking shaky, don’t even consider using home equity for nonessentials like remodeling. Treat the equity like an emergency fund.

Find the right financial adviser

Finding a financial adviser you can trust doesn't have to be hard. A great place to start is with SmartAsset's free financial adviser matching tool, which connects you with up to three qualified financial advisers in five minutes. Each adviser is vetted by SmartAsset and is legally required to act in your best interests.

If you're ready to be matched with local advisers who will help you reach your financial goals, get started now.

Beware These 5 Common Work-From-Home Scams
Beware These 5 Common Work-From-Home Scams

You can spot scammers and con artists with a little know-how.

21 Generic Brands That Amazon Created
21 Generic Brands That Amazon Created

Amazon’s growing collection of private brands offers everything from paper towels and groceries to furniture and clothing.

Brace to Pay More for These 26 Prescriptions in 2020
Brace to Pay More for These 26 Prescriptions in 2020

More than 600 drugs — including these commonly prescribed meds — have seen price hikes so far this year.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.