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Americans are Retiring With Less

Survey finds that 44 percent of Americans are still paying for their home when they retire.

Americans currently entering retirement are in worse financial shape than the prior generation, the first time that’s happened since Harry Truman was president, reports The Wall Street Journal.

Their median incomes including Social Security and retirement-fund receipts have been languishing, after having increased steadily from the 1950s. They have high average debt, are often paying off children’s educations and are dipping into savings to care for aging parents. Their paltry 401(k) retirement funds will bring in a median income of under $8,000 a year for a household of two.

The decline of pensions and increase in 401(k) and similar plans is one reason many seniors aren’t as ready for retirement as the previous generation.

In total, more than 40% of households headed by people aged 55 through 70 lack sufficient resources to maintain their living standard in retirement, a Wall Street Journal analysis concluded. That is around 15 million American households.

Traditionally, homeowners looked forward to paying off their mortgage before retirement and living out their golden years without the heavy burden of a monthly house payment. But that scenario is becoming less common, according to a recent survey. 

The survey, "Retirement and Mortgages," by national mortgage banker American Financing, found 44 percent of Americans between the ages of 60 and 70 have a mortgage when they retire, and as many as 17 percent of those surveyed say they may never pay it off. The survey also found that 32 percent predict they will be paying their mortgage for at least eight more years. These results closely mirror findings from an October 2017 Fannie Mae report that showed that today’s older boomers — those born between 1946 and 1951 — demonstrate a greater likelihood of carrying mortgage debt than previous generations.  

© 2018 Liberty Publishing, Inc. All rights reserved. Distributed by Financial Media Exchange.

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