The Employee Benefit Research Institute Research on Tuesday released research studying the effect of Social Security cuts on Generation Xers.
The vast majority of Gen Xers – 83 percent – don’t believe Social Security will still be around when they retire.
The Social Security Administration says that the trust fund will run out of money sometime between 2033 and 2037. That’s precisely when Generation X will begin retiring.
Even if the fund stays solvent, Social Security benefits may be scaled back by 2033. How much do Gen Xers need to save to offset potential benefit cuts?
Financial Advisor magazine has the numbers:
Generation Xers may need to save an extra $27,000 to $79,000 for retirement if possible reductions to Social Security come true, Employee Benefit Research Institute Research Director Jack VanDerhei said Tuesday.
VanDerhei said the extra savings numbers are based on projections of a roughly one-fourth reduction in Social Security payments to Gen X retirees if the system’s trust fund goes to zero, as some believe it may.
The extra $27,000 is the additional amount GenX married couples born between 1965 and 1978 would need to have savied when they reach 65 to stay even if the reductions happen. The higher number is for single females the same age. A single male would need to save an additional $43,000.
Single females need to accumulate more because they generally have higher life expectancies and have saved less than the average male.
Click here to see the full research brief from the Employee Benefit Research Institute.
Photo by 401kcalculator.org via Flickr CC License
