Sadly, it’s possible. According to a 2018 study, 8.5 million middle-class Americans will experience “downward mobility” in retirement.Specifically, if workers aged 50-60 retire at 62, they can expect a gross income of below $23,340 for singles and $31,260 for couples. Those figures are dangerously close to the US Poverty line—which is $12,490 for a single person and $16,910 for two-adult households (presumedly couples), according to a federal guidelines chart. So, given the stats, one could infer that the average working American may not be strolling into post-career bliss any time soon.

This seems mildly unsurprising since half of all Americans have less than 5,000 bucks in retirement savings. Twenty-nine percent of households ages 55 plus have no savings or pension at all. This means Social Security benefits will be the only source of income during retirement for many retirees. That’s unsettling, considering most don’t make much more than a minimum wage job from social security.

retire couple walking

And experts continue to tout that your retirement savings should be closing in on a million dollars. Others suggest a retirement savings “rule of thumb” like the “80 percent rule” in preretirement and the “4 percent rule” during retirement.But for so many working Americans, it just doesn’t seem feasible.

But how are retirees so unprepared in one of the richest nations in the world?

Of course, that topic topples into an argument over economic policy and social reform—from which I will gladly abstain. But to be thorough, some say the government needs to play a bigger role. Some point to consumerism. Some blame employers. It could be poor budgeting practices by the individual—buying extra features on their new vehicle instead of stuffing that capital into the ol’ sock. Credit card debt, school loans, medical bills —the list is infinite.

Speculation aside, a problem still begs a solution.

The New School SCEPA (from which many of these stats originate) suggests that strengthening Social Security and creating Guaranteed Retirement Accounts (GRAs) could keep retirees above the poverty line. It includes four proposals:

  • Mandated employer and employee contributions on 1.5% each
  • Professionally-managed individual accounts in pooled and diversified funds.
  • Tax-credit refunds to help low income earners
  • Lifetime annuitized payout

Obviously, this proposition falls on a certain side of the political spectrum, of which not everyone agrees. But it does, in the very least, point out a pressing issue that affects us all. The solution from the top may be up for debate but there are still decisions left to the individual.

For instance, you can continue working a few years later, delay social security, invest your savings in a diversified low-cost index fund. You can explore annuities and different IRAs. BUT it’s safe to say that saving now rather than later is going to determine your lifestyle in retirement.

That is to say, Americans should be packing away savings like packrats. But first, contacting your financial advisor—someone who knows you and your situation—would be the clear first step. They can help you understand the best IRA strategy. They can help you estimate future needs, when to take social security—anything that can help you moving forward.

But the worst thing you can do is wait.