Coloradans relying on 401(k) income face retirement challenges
People retiring in Colorado and across the country are among the first generation to rely on private savings instead of pensions to navigate the financial vortex of retirement.
Why it matters: 401(k) plans and IRAs don't generate steady and predictable income like pensions or Social Security. The result is a feeling of perpetual insecurity, even among those who've amassed substantial savings, writes Axios' Felix Salmon.
By the numbers: People 65 and older account for about 12% of Denver County's population, per Census Bureau figures.
- Statewide, the senior population is expected to grow 47% by 2040, from 859,000 in 2020 to nearly 1.3 million older residents, according to a Georgetown Center for Retirement Initiatives report.
Yes, but: 41% of private sector employees in the state lack access to a retirement savings plan at work.
- 20% of Colorado seniors between 2018 and 2019 relied on their Social Security for at least 90% of their income, the report shows.
The big picture: For most retired Americans, many of whom left the workforce as long ago as the last century, guaranteed income still covers more than half of their total monthly spending.
- Today's retirees find themselves in a much more uncertain situation, with a host of spending needs — some foreseeable, some coming out of the blue — all having to be funded out of a volatile and unpredictable retirement portfolio.
- In a recent Goldman Sachs survey, 51% of retirees reported living on less than half the income they enjoyed pre-retirement.
What's next: Those numbers are certain to rise as guaranteed incomes make up an ever-smaller proportion of retirement income.
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