40 Percent of the American Middle Class Faces Poverty in Retirement, Study Concludes

A study by the Schwartz Center for Economic Policy Analysis at the New School estimates that approximately 40 percent of middle-class Americans are at risk of poverty in retirement on account of depressed earnings and asset values and increased healthcare costs, reports CNBC . In addition, 74 percent of U.S. workers are planning to work past traditional retirement age. The researchers determined if workers age 50 to 60 choose to retire at 62, 8.5 million will fall below twice the Federal Poverty Level, with retirement incomes below $23,340 for singles and $31,260 for couples. Moreover, 2.6 million of those downwardly mobile workers and their spouses will have incomes below the poverty level — $11,670 for an individual and $15,730 for a two-person household. Both workers and employers must strive toward a solution, with the former upping their personal savings and the latter guaranteeing that defined benefit plans are efficient and sufficient. Such plans must be managed like a separate line of business, with budgets, projections, and a strategic plan. Finally, pension plan sponsors must monitor investment strategies on a ongoing basis, along with the impact of potential regulatory changes to ensure they are suitably managing their risk and cost issues, but acting in the most prudent manner for current employees and retirees.