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Work, Retire, Repeat
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Work, Retire, Repeat

The Uncertainty of Retirement in the New Economy

Teresa Ghilarducci
University of Chicago Press, 2024
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US stock and home values reached record levels in 2024, a boom that created the impression that all is well in the American economy. The reality is more troubling than the headlines indicate, economist Teresa Ghilarducci writes in this sobering text. While the upper echelon of American workers is doing well, the teeming masses are left behind, with little or nothing in their nest eggs, and constrained to working low-paying jobs into their 70s. Ghilarducci offers some prescriptions to address the problem, including more public support for the retirement system. Anyone considering retiring one day will appreciate this important insight into a possible future.

Summary

US workers face a retirement crisis.

Many workers in the United States are woefully unprepared for retirement. Among lower-wage workers in their 50s, most have no retirement savings, and those who do have a nest egg of an average of just $42,000. Middle-income workers — those making $48,000 to $137,000 in 2020 – have median savings of $101,000.Even among those making more than $137,000, the Social Security earnings cap for 2020, more than one-quarter had saved nothing for retirement.

Given the harsh math, many Americans have no choice but to keep working well past the age of 65. And for workers in low- and middle-income jobs, the choice is not an ideal one. The physical and mental toll from those kinds of positions often means that workers die sooner and therefore have shorter retirement periods to fund.Researchers and economists generally have concluded that Americans should work longer; rather than retire at 62 or 65, they should keep going into their 70s. However, this seemingly common-sense advice doesn’t do much to boost workers’ wealth. Instead, it simply reduces the number of non-working years they must fund.

For most Americans, “retirement...

About the Author

Teresa Ghilarducci is a professor of economics and policy analysis at the New School for Social Research in New York City. She writes a regular column for Forbes’ #RetireWell blog.

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