Poverty Among Retirees Is Growing: Here’s Why

Have you consulted with your clients about their retirement readiness? Many employers and plan participants don’t give their retirement planning much thought until they reach a certain age. However, future retirees must understand it’s incredibly wise to start putting away money for the road ahead as soon as possible.

Key Takeaways:

• Life after retirement can get expensive, take the time to help your clients plan.
• Participating in a retirement plan can help cover expenses for future retirees that Social Security and Medicare may not. 
• You can help your clients understand how easy it is to manage their accounts by showing them the easy-to-use ePlan Services resources.

Post-Retirement Expenses:

If your clients are like many individuals, they may think that Social Security and Medicare will take care of their needs during retirement. However, these future retirees are in for a rude awakening. While Social Security may prove helpful as supplemental income, it shouldn’t be depended on to meet all of their needs. This is especially true since Social Security is expected to deplete by 2035.

Poverty in this demographic is already growing, well in advance of 2035. Currently, the poverty rate for those aged 65 and older is 10.7% compared to 10.3% in 2021. The Supplemental Poverty Measure, (SPM), determined that poverty among individuals aged 65 and older would only continue to increase without the financial assistance of Social Security, housing subsidies, or SNAP.

In addition to housing, out-of-pocket expenses for medical care are the leading cause of poverty among retirees. For example, Medicare insurance may not fully cover your clients’ medical expenses, and because it’s designed to cover hospital care (and not long-term stays in retirement facilities) it won’t cover an extended stay in a nursing home.

Now is your chance to help your clients get ahead of these issues. Consulting with them about the importance of plan participation can be a step in the right direction to helping them prepare for life post-career.  

How retirement plan participation can help:

Contributing to a retirement plan early can help your clients breathe a sigh of relief when thinking about their future. The earlier they begin contributing, the more time they’ll have to watch their savings mature.

If your clients choose to enroll in a company-sponsored retirement plan provided by ePlan Services, they can use our streamlined participant dashboard to make changes to their contribution amounts at will. This will allow them to save money more conservatively or aggressively. They can also use the retirement outlook calculator to calculate how much they may need for retirement. Regardless of the amount they contribute, every little bit will make all the difference in the long run.

Helpful client resources:

Do your clients and future retirees, need additional information about retirement planning? ePlan Services has a dedicated blog page and help center that will educate them on a variety of retirement topics and frequently asked questions.

Conclusion:

Poverty doesn’t have to be your clients’ future. Arming them with everything they need to know about retirement before they become retirees can go a long way in helping them prepare for life’s twists and turns. Now is the time to have important conversations with your clients in order to set them up for success.