Working longer and saving a greater share of one's salary will become two hallmarks of this era of retirement. Another defining feature will be workers' own responsibility to manage their portfolios and retirement savings — with little guidance, so far, from the federal government, employers, or the private sector. "This is the bigger issue looking down the road, because you'll have people relying more on their private savings, and we know there is a problem in this country with savings," says Gary Koenig, vice president of economic and consumer security within AARP's Public Policy Institute.
The final defining feature will be the growing gap in the retirement outlook for low-income people versus the well-off; it's yet another variation of the country's growing two-track economy, which favors people with resources over those without. "What you end up finding is that, in the top 25 percent of the socioeconomic range, most retirees will be fine," says Dallas Salisbury, president and CEO of the Employee Benefit Research Institute. "For those in the bottom 25 percent, there has always been a crisis in retirement, particularly if the measurement is whether they have enough money to cover expenses for the balance of their lifetime." New research — conducted by the firm Oxford Economics and funded by AARP, the U.S. Chamber of Commerce, and various financial-services companies — shows that Americans in the bottom quartile of the income ladder need to save about 21 percent more pretax income than they currently do, compared with just 0.15 percent for those in the top 25 percent.
That's certainly the case for Antonio Sueiras, a 59-year-old unemployed Army veteran who resides in low-income housing in Homestead, Fla. He lives day to day off the savings he accumulated from his last job as a telephone-switchboard operator and the roughly $190 in food stamps he receives each month. Asked about his plans for retirement, he just laughs. "I need something coming in now," he says. "I still have a stretch there before retirement, so I hope I can get someone to hire me." Armed with just a high school degree and a certificate in automotive mechanics, Sueiras has been looking for work for the past several months after he lost two jobs back to back.
Other Americans, such as Dorry Clay, did not anticipate the way an emergency would upend their retirement plans. In 2008, the 54-year-old resident of Stonington, Conn., lost her job as an artist and Web designer at a small advertising company. Two years later, she received a diagnosis of breast cancer. Treating it restored her health but also cost her her life savings. Now Clay lives off Social Security disability checks and says that her standard of living could easily deteriorate as she ages. "I don't know how it will play out," she says by phone from Connecticut. "You just cut back on everything you can possibly cut back on and scramble to pay your bills."