Are You Worried About Retirement?

It’s the not-so-perfect confluence of factors. 

Pandemic savings dried up. With persistent inflation, maybe you or somebody you know spent some (or all) of that savings on life. 

Or maybe you have ample cash in the bank and want to or recently bought a house. Despite the apparent cooldown in the housing market, the typical monthly mortgage payment hit another all-time high of $2,538 this month. 

$2,538. To commit no more than 30% of your income to this payment, you need to earn roughly $101,520 a year. More on these potentially depressing numbers in tomorrow’s Juice. 

Up against all of this, it’s no wonder an increasing number of people are freaking out about retirement. 

According to an Employee Benefit Research Institute (EBRI) survey of 2,537 Americans, ages 25 and older, people haven’t been this pessimistic about retirement in 15 years. 

Do the math: 2023 minus 15 equals 2008. You know what happened then.

Key highlights from the survey: 

• Among people currently working, 64% are “somewhat” or “very confident” that they’ll have enough cash to “live comfortably” in retirement. This is down from 73% in 2022. 
• For comparison’s sake, during the Great Recession and housing crisis (that’s what happened in 2008), just 54% reported being “somewhat” or “very confident” when asked the same question. 

The picture is a bit less bleak for folks who have already retired: 

• 73% of retirees say they’re “somewhat” or “very confident” they have enough cash to live comfortably throughout retirement. This is down from 77% a year ago. 
• In 2008, this number was 67%. 

The Bottom Line: If you’re working and worried about retirement, saving as much as you can matters. However, what you pay for housing might matter just as much, if not more. Staring down a lofty housing obligation is no way to start every single month.

Consider staying put if you’re one of the many American homeowners locked into a low mortgage interest rate or, better yet, with no mortgage payment at all. If you rent – and you’re doing well financially – assess how much your cost of living might increase if you become a homeowner. 

Cash flow is king, as you save on the road to retirement and as you strive to not outlive your nest egg during retirement.

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