Young Workers and Retirement Anxiety
By: Jenna Savage
Planning out a career can be stressful, especially for students who are on the verge of graduating from college and being set free into the working world. Unemployment rates and lack of job security plague many Americans, students included. Retirement funds and other benefits are common concerns for Americans in the work force. And according to a PsychCentral article, the demographic most affected by retirement anxiety and uncertainty is young Americans.
A study conducted by the Pew Research Center recently revealed that despite the recovery of the economy, job market, and stock market, four out of 10 Americans are worried that they will not have the money that they need to retire when they reach retirement age. This is a higher ratio than was seen by Pew Research Center in 2009, when only one in four Americans were worried that they would not be prepared for retirement when the time comes.
It turns out that young adults are the ones who are suffering from the most retirement anxiety, whereas in 2009, Americans who were in their 50s suffered from the highest levels of uncertainty regarding retirement funding. In particular, more than half of individuals aged 36 to 40 fear that what they have set aside for retirement will not last them throughout their retirement years.
This is influenced by the state of the economy – which is improving, but at a slow rate. Researchers also speculate that decreasing home values have played a part in causing this increased level of anxiety as well. The median wealth held by young adults has also decreased, leaving many with less money than the demographic had back in 2001, before the economy took a plunge.
People between the ages of 55 and 64 lost some of their wealth as the economy suffered, but it amounted to about a fifth of what it was in 2001. Meanwhile, young adults were shown to have lost more than half of what the demographic held in 2001. Due to such losses, anxiety among young adults is more prevalent.
Many young workers are also concerned that they will not be able to secure positions with pensions, and therefore will need to rely on their own savings accounts to prepare for retirement. Some are concerned that they will only have Social Security to get them through their retirement years.
Despite the rising levels of anxiety seen among young people, there are ways to prepare for retirement, even without the availability of a pension plan. Our Friday article will address ways for young Americans to combat retirement anxiety, along with tips for preparing for retirement early on.