Wage growth outpacing inflation has boosted optimism for long-term goals like retirement. However, concerns remain about factors that could derail retirement plans, such as rising living costs and potential changes to the U.S. retirement system. While Social Security benefits are expected to decline in the future, recent legislation has made some improvements for retirement savings.
Many Americans, particularly lower earners, struggle with retirement planning. Only half of households have retirement accounts, with the median balance being around $87,000. Competing financial priorities, such as emergencies, college savings, and housing costs, make saving for retirement difficult. Additionally, high inflation and debt levels have further strained Americans' financial capacity.
Parents are increasingly supporting their adult children financially despite the potential impact on their own retirement. Nearly half of parents provide an average of $1,384 per month. High living costs and student debt contribute to this need. However, experts emphasize the importance of parents prioritizing their financial stability, setting limits, and establishing a timeframe for support to align with their retirement plans.
