Not to be snarky, but surely that must be the reaction many people have when questioned about their retirement goals. I say “surely” because yet another study has come out documenting the sorry state of many Americans’ financial preparedness for retirement.
In fact, this latest report — from Washington-based HelloWallet, a research and advisory firm focused on personal finance — finds that a majority of Americans enrolled in defined-contribution plans are actually accumulating debt faster than they are setting money aside for retirement. The report finds that the amount of money that working Americans nearing retirement are using to pay down their debts has increased by 69 percent during the past 20 years and that households headed by those ages 55 to 64 now spend 22 cents out of every dollar paying off loans –the same percentage as younger people, according to the report.
People are indeed approaching retirement much more in debt than in the past, economics professor Olivia Mitchell tells the Washington Post. The main reasons appear to be greater spending on housing, larger and more auto loans and more credit card debt, says Mitchell, who heads the Pension Research Council at the University of Pennsylvania’s Wharton School.
I’m certain that increased spending on the latest TVs, tablets, cars and other gadgets is playing some role in this — after all, people want what they want, even if middle-class incomes have been stagnant for more than a decade. But if we also take into account the near-continuous rise in the cost of housing, college and medical care, not to mention those returning-to-the-nest twentysomethings who can’t find jobs, we might be a little less judgmental.