{"id":86387,"date":"2020-10-10T17:19:56","date_gmt":"2020-10-10T14:19:56","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/opinion-half-of-americans-over-55-may-retire-poor\/"},"modified":"2020-10-10T17:19:56","modified_gmt":"2020-10-10T14:19:56","slug":"opinion-half-of-americans-over-55-may-retire-poor","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/opinion-half-of-americans-over-55-may-retire-poor\/","title":{"rendered":"#\n  Opinion: Half of Americans over 55 may retire poor"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a407a7064fd1\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a407a7064fd1\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-half-of-americans-over-55-may-retire-poor\/#COVID-19_job_losses_early_withdrawals_may_decimate_retirement_finances\" >COVID-19 job losses, early withdrawals may decimate retirement finances<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-half-of-americans-over-55-may-retire-poor\/#Howard_Gold\" >Howard Gold<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  Opinion: Half of Americans over 55 may retire poor<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"COVID-19_job_losses_early_withdrawals_may_decimate_retirement_finances\"><\/span>\n  COVID-19 job losses, early withdrawals may decimate retirement finances<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"152B3908-03ED-11EB-B0ED-101D416154BC\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       How badly is COVID-19 hurting Americans on the cusp of retirement? Maybe worse than we thought.<\/p>\n<p> In an interview, economist Teresa Ghilarducci, a professor at The New School in New York City and one of the nation\u2019s leading experts on retirement, told me that half\u2014that\u2019s right, half\u2014of Americans aged 55 and up will retire in poverty or near poverty. <\/p>\n<p>Read: Should you change your investments because it\u2019s an election year?<\/p>\n<div class=\"paywall\">\n       \u201cOur data is showing that, because of the COVID recession, about 50% of workers over the age of 55 will be poor or near-poor adults when they reach 65,\u201d she said.<\/p>\n<div data-layout=\"\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaVideo\n            \n            \n  article__inset\n        article__inset--type-InsetMediaVideo\n            article__inset--\n  \"><\/p>\n<figure class=\"media-object-video article__inset__video media-object-video--standard\">\n<div class=\"wsj-media-summary clearfix\">\n<div class=\"strap-container\">\n<h4 class=\"strap\" itemprop=\"description\">\n<\/h4><\/div>\n<\/p><\/div>\n<div class=\"video-container article__inset__video__player\" id=\"http:\/\/www.marketwatch.com\/news\/61AD778B-C50D-4EC0-A82F-2942D613BC47\" data-src=\"http:\/\/www.marketwatch.com\/news\/61AD778B-C50D-4EC0-A82F-2942D613BC47\" data-format=\"standard\" data-esplash=\"\" data-msplash=\"\" data-suppressheadline=\"\" data-verticalstill=\"\">\n  <\/div><figcaption class=\"wsj-article-caption article__inset__video__caption\">\n          80% of older Americans can&#8217;t afford to retire &#8211; COVID-19 isn&#8217;t helping<br \/>\n        <\/figcaption><\/figure>\n<\/div>\n<p>       How poor is that? \u201cA person who\u2019s 65 will be near-poor or poor if they\u2019re living on less than $20,000 a year,\u201d she told me. \u201cI think we could all agree that means chronic deprivation for the rest of your life.\u201d<\/p>\n<p>This is shocking and although I\u2019ve viewed the retirement situation in the United States as more of a chronic illness than a crisis, this would make it a crisis for millions of Americans. It also would reverse decades of progress toward eliminating poverty among the elderly, from the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Social<\/a> Security Act of 1935 through Medicare in 1965 and beyond. As more people turn 65 and face poverty-stricken retirements, the fiscal and political implications could be enormous.<\/p>\n<p>Read: Social Security missteps could push millions of Americans into poverty<\/p>\n<p>What\u2019s behind this? People losing their jobs and health insurance because of COVID-19? Or losing the employer match on their 401(k) contributions? Or having to tap into retirement savings to cover daily expenses? \u201cAll of the above,\u201d said Ghilarducci. <\/p>\n<p>But it starts with job losses. \u201cOlder workers are losing their jobs at a faster rate, relative to younger people and relative to where they had been before than they were in the Great Recession,\u201d she told me. <\/p>\n<p>Read: Hope to retire someday? See if you can answer these 6 simple questions<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>Unfortunately, many of those job losses will be permanent, she fears. A report done by the New School Retirement Equity Lab found that over half of older unemployed workers may be <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.economicpolicyresearch.org\/images\/INET_docs\/Status_of_older_workers_reports\/Q1_2020_OWAG_V12.pdf\" class=\"icon none\">forced into involuntary retirement<\/a>. Nearly three million older workers have left the labor force since March and if the economic disruptions caused by COVID-19 continue, another million could join them soon. <\/p>\n<p>\u201cA total of four million people potentially pushed into retirement before they are ready will increase old-age poverty and exacerbate the recession,\u201d Ghilarducci and her colleagues wrote. <\/p>\n<p>Read: Today\u2019s older workers may see the first cuts to Social Security<\/p>\n<p>For older workers, job losses can have cascading effects on their personal finances. <\/p>\n<p>\u201cWhen older workers lose their jobs, they lose access to savings. They lose their employer\u2019s contribution, and they face the temptation of drawing down their retirement assets,\u201d she told me.<\/p>\n<p>And while we\u2019re on the subject of employer contributions, guess what? \u201cEmployers have changed their behavior,\u201d she said. \u201cIn 2009, 20% of employers stopped contributing to the 401(k). But now over 50% of employers have stopped contributing to the 401(k). They learned they could get away with it.\u201d<\/p>\n<p>Read: Employers start to suspend the 401(k) match<\/p>\n<p>That\u2019s a big blow to employees who count on those contributions to help them build their retirement nest eggs. Some studies have shown employer matches induced more employees to contribute to their 401(k) plans. Without those matches, they might not contribute at all. \u201cWe\u2019re inferring from these practices and past behavior that people have stopped saving for their retirement,\u201d Ghilarducci told me.<\/p>\n<p>Even worse, they may feel compelled to tap into their retirement savings to pay the bills. Until now that number has been pretty small\u20142% of people with retirement accounts at Vanguard and 3% at Fidelity <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2020\/07\/27\/how-many-people-took-100000-from-retirement-plans-due-to-covid-19.html\" class=\"icon none\">withdrew money from those accounts<\/a> through June. And the CARES Act removed the 10% penalty on withdrawals up to $100,000 from those accounts for people under 59\u00bd. It also allows them to <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2020\/07\/27\/how-many-people-took-100000-from-retirement-plans-due-to-covid-19.html\" class=\"icon none\">pay back the money over a three-year period<\/a> without having their withdrawals recognized as income for tax purposes. <\/p>\n<p>Read: The simplest way to cut your tax bill \u2014 even if your name isn\u2019t Trump<\/p>\n<p>But if a new wave of COVID-19 prompts a new wave of layoffs, more people may draw down those savings, meeting their present needs at the expense, perhaps, of their future retirement security. Most vulnerable now: people in their late 50s suffering permanent job losses but too young to collect Social Security or Medicare. Millions of people could fall between the cracks.<\/p>\n<p>Ghilarducci recommends if you\u2019re working now, to build up a six-month emergency fund\u2014pronto. \u201cMake sure that the money piling up in your checking account isn\u2019t there for pent-up demand for your car or your clothes,\u201d she said. If an employer dropped its 401(k) match, she recommends you cover it anyway, if you can. And \u201cdon\u2019t quit your job. If you\u2019re older and you\u2019re afraid of the virus, get a hazmat suit,\u201d she said.<\/p>\n<p>Has it really come to this\u2014people being forced to choose between their physical and financial health? That\u2019s what the virus and the reaction to it have wrought, and millions of people may have to live with the financial aftershocks for years to come.<\/p>\n<div data-layout=\"\n              inline\" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetCommentingPromo\n            \n            inline\n  article__inset\n        article__inset--type-InsetCommentingPromo\n            article__inset--inline\n  \"><\/p><\/div>\n<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Howard Gold\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Howard_Gold\"><\/span>Howard Gold<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener noreferrer\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B152B3908-03ED-11EB-B0ED-101D416154BC%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener noreferrer\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Opinion: Half of Americans over 55 may retire poor &#8221; COVID-19 job losses, early withdrawals may decimate retirement finances How badly is COVID-19 hurting Americans on the cusp of retirement? Maybe worse than we thought. In an interview, economist Teresa Ghilarducci, a professor at The New School in New York City and one of&#8230;<\/p>\n","protected":false},"author":1,"featured_media":86388,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-86387","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/86387","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=86387"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/86387\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/86388"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=86387"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=86387"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=86387"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}