The American middle class is working harder than ever but still not feeling very financially secure. According to a new report from the nonprofit Transamerica Institute’s Transamerica Center for Retirement Studies® (TCRS), many U.S. adults earning between $50,000 and $199,999 annually — the general designation for “middle class,” which represents 56% of the U.S. adult general population — are struggling to feel secure amid rising costs, higher interest rates, continued layoffs in major sectors, and growing pressure in the workplace.
“The middle class embodies the American dream, but their retirement outlook is unclear,” Catherine Collinson, CEO and president of Transamerica Institute and TCRS, said upon the release of “Retirement Throughout the Ages: The American Middle Class,” a 93-page survey-based report that the center published earlier this month. “The middle class is working hard, caring for their families, and saving for the future while navigating an evolving economy, artificial intelligence, the aging population and need for caregivers, and Social Security uncertainties.”
The report includes responses from more than 5,300 middle-class U.S. adults and provides comparisons by age range — including people in their twenties, thirties, forties, fifties, sixties, and seventies and beyond.
Here are three other key takeaways:
- Caregiving responsibilities are impacting employment. Among those who are not retired, 38% are currently serving and/or have served as a caregiver for a relative or friend during their career, and 84% of them have made one or more adjustments to their work situation due to caregiving responsibilities.
- Most middle-class individuals don’t have a written financial strategy. Only 25% have a written plan, while 49% have an unwritten plan — and 26% have no plan at all.
- Employees approaching retirement are concerned about Social Security. Among those who are not yet retired, 72% say they are concerned Social Security won’t be available when they’re ready to retire.
Positive highlights emerged, too. According to the report, people in the middle class have positive feelings about life — including having close relationships with family and/or friends (87%), being generally happy (85%), and enjoying life (84%).
The report also includes a call to action: “People in the middle class are working hard and saving for the future, but their ability to achieve a financially secure retirement is hanging in the balance. They need more support from policymakers, the financial services industry, and employers. A collaborative approach is needed to ensure that the middle class has access to workplace retirement benefits, products and services, social safety nets, and the know-how that is required for success. The sooner we intensify our efforts, the more quickly we can strengthen their retirement security.”
Employers can help, according to TCRS, by offering health and welfare benefits that promote physical, mental, and financial health and wellbeing; extending benefits eligibility to part-time workers; offering pre-retirees greater levels of assistance in planning their transition to retirement; and promoting the benefits they offer employees.
Likewise, actions middle-class employees can take now include engaging in financial planning to gain a fuller understanding of their financial situation, calculating retirement savings needs and developing a retirement strategy, avoiding taking loans and early withdrawals from retirement accounts, and reviewing their retirement savings portfolio to ensure investments are consistent with their risk profile and years to retirement.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.