Vermonters Urged to Start Saving for Retirement
Elderly Americans rely on Social Security as their major source of retirement income
MONTPELIER, Vt.- The “gold” may become a little tarnished on those golden retirement years for many Vermonters, who could find themselves short on cash and long on expenses. By 2030, nearly one-fourth of Vermont’s population will be age 65 and older; and national savings statistics indicate most won’t have saved enough money to meet their retirement needs.
State officials today called attention to the need to save for retirement. Governor Jim Douglas signed a proclamation officially designating October 21-27 as “Save for Retirement Week” in Vermont. The U.S. Congress also has designated that week as a national period for Americans to consider whether they are financially prepared for retirement.
“The U.S. personal savings rate is now at a negative one percent,” said Governor Douglas. “Studies indicate that most elderly Americans rely on Social Security as their major source of retirement income. In this state, the annual benefit paid to a Vermont worker is less than $12,000. These numbers give us cause for concern. While our administration works every day to make Vermont a more affordable place to live and work, I hope that Vermonters will use this week to consider whether they are prepared to meet their future financial needs.”
Inflation, the rising cost of healthcare, and longer life spans are combining to place a greater financial burden on all retired Vermonters.
“It’s estimated that you will need at least 70 percent of today’s income in retirement to maintain the same standard of living enjoyed prior to retiring,” said State Treasurer Jeb Spaulding. “Among those Americans who are saving, a 2007 workforce survey indicated 41 percent of workers age 55 and older had saved less than $50,000. If you consider that the average American spends 18 years in retirement, it becomes apparent that many people are going to run out of money.”
One result of the lack of personal savings will be people delaying retirement and working longer. Research conducted by the AARP showed that 80 percent of people born during the Baby Boom expect to continue working in some form past the age of 65.
“There is a concern among our members about how they will be able to afford to retire,” said AARP Vermont Acting State Director Jennifer Wallace-Brodeur. “Our surveys show that two out of three people 50 and over view retirement as a time to begin a new chapter, start new activities, and set new goals. The more financially prepared individuals are for this phase of life, the more flexibility they’ll have to pursue new activities rather than being locked into a particular job or career.”
