Retirement Savings Risk, Social Security Addressed by GAO
Delaying social security is one of the measures recommended by the GAO recently to bolster retirement savings.
A study released today by the GAO indicates that the “risk that retirees will outlive their assets is a growing challenge,” and cites increased longevity as one of the reasons individuals may need to reevaluate their retirement savings strategy. Longer lifespans aren’t the only reason that planning for retirement may be a challenge for some Americans, though:
Increased life expectancies and health-care costs coupled with declines in financial markets and home equity over the last few years have “intensified” workers’ concerns about how to manage their savings in retirement, the report said.
The GAO study on retirement savings indicates that middle-income Americans should consider purchasing an inflation-adjusted annuity to plan for retirement, but that lower-income families should bolster savings before looking into annuities. The study also recommended a withdrawal rate of 3-6% annually to avoid the risk of outliving savings.
You can read a thorough breakdown of the GAO study on retirement savings at Bloomberg.