A fifth of workers over age 45 have quit adding to their 401(k)s.
Mary Knox Merrill/The Christian Science Monitor
Stock gyrations and a slumping economy are battering a generation's hopes for a comfortable retirement.
The current financial crisis has destroyed more than $2 trillion of the wealth held in retirement plans, according to Congressional Budget Office estimates. Even before that loss, Americans weren't saving enough to maintain expected standards of living in their senior years.
Now the bad news from broker statements may be confronting workers and retirees with brutal choices. Pay the mortgage or keep up the 401(k) contributions? Buy groceries or leave untouched a nest egg that shrinks by the day?
"Many people are making quick-fix decisions that put their financial future at risk," says Jean Setzfand, director of financial security at AARP, in a recent analysis of the state of US retirement security.
The good news for retirees is that the bedrock of the US retirement system, Social Security benefits, remains untouched by the crisis. On Oct. 16, the Social Security Administration (SSA) announced that beneficiaries will get a 5.8 percent cost-of-living increase in their checks next year. That's the largest such rise in a quarter-century.
The average retiree will get an additional $63 per month, according to the SSA.
A majority of retired Americans get more than half their income from Social Security.