About 19% of retirees have already outlived their retirement savings, according to a Clever study. (iStock)
Many retirees are struggling to make ends meet during retirement. About 66% of current retirees say the U.S. is facing a retirement crisis, a Clever study reported.
This crisis is largely due to a lack of funds for retirement. Nearly 40% of respondents to Clever’s survey are seriously concerned they’ll outlive their retirement savings. Many retirees have already outlived their savings.
Certain retirees face a lack of savings more than others. Retired women are 33% more likely than men to struggle financially during retirement, the survey said. Approximately 28% of women have nothing saved for retirement, compared to 20% of men.
To retire comfortably, experts estimate that retirees need a little over $1 million saved, but the exact number depends on how the retiree wants to live and where.
"The first question I want to know is where do you want to live? If you’re living in New York where I am, well that number is going to be higher than in other states or out of the country even," said Craig Ferrantino, a financial advisor in Melville, N.Y.
The average retiree doesn’t have anywhere close to $1 million saved. Most retirees have just $142,500 in savings, according to Clever’s study. Almost half (46%) of retirees are unprepared for the possibility of running out of retirement savings.
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SENIORS SAY 2024 SOCIAL SECURITY PAYMENT INCREASE NOT ENOUGH TO KEEP UP WITH INFLATION: SURVEY
Younger generations are already worried about retirement
Gen Zers aren’t expecting to have enough saved for retirement either. Roughly one quarter (23%) of Gen Zers don’t expect to retire at all, a McKinsey & Company report found.
The younger generation attributes this inability to retire in the future to current low wages. Working Gen Zers reported a lack of fair pay for their work, more so than other generations — 26% of Gen Zers say their pay doesn’t allow them a good quality of life compared to 20% of other generations.
Millennials aren’t much more optimistic about their retirement. About 72% of millennials are pessimistic about ever reaching a financially secure place in retirement, a survey from the National Institute on Retirement Security reported.
Older generations don’t share the same amount of pessimism, although it’s still present. Forty-three percent of Baby Boomers are concerned about a financially secure retirement, while just 26% of the Silent Generation reported feeling down about their retirement options.
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GEN Z IS WORRIED THEY’LL NEVER RETIRE, BUT MORE SAVE FOR RETIREMENT THAN ANY OTHER GENERATION
Retirement changes for smaller companies may be on the horizon
A recent bill introduced by Rep. Richard Neal, a Democrat from Massachusetts, would require employers with more than 10 employees to automatically enroll their employees in certain retirement accounts.
Currently, most employers have the option to offer automatic retirement enrollment, but it’s not required. If passed, the bill would require most companies to implement automatic enrollment, with an option for employees to opt-out if they wish. The legislation would go into effect in 2026.
"It builds on proven policy solutions: 19 states have implemented state-based automatic IRA-for-all programs for private-sector employees," Thasunda Brown Duckett, president and chief executive of TIAA, said. "A federal program would help ensure workers’ pathway to retirement security no longer depends on their employer or state."
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SOCIAL SECURITY IS COMING FOR A BIGGER CHUNK OF YOUR PAYCHECK
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FAQs
What are the average and median retirement savings? The average retirement savings for all families is $333,940, according to the 2022 Survey of Consumer Finances. The median retirement savings for all families is $87,000. Taken on their own, those numbers aren't incredibly helpful.
What percentage of 60 year olds have no retirement savings? ›
Adults with any retirement savings in the U.S. 2021-2022, by age group. In 2022, 88 percent of U.S. citizens who were 60 years old or older had some type of retirement savings. This information can be interpreted by the number of people in that age group without any retirement savings, which amounted to 12 percent.
At what age will most millennials retire? ›
In a February poll, YouGov asked millennials when they expect to retire. The largest share, 30%, chose the age range of 51 to 60. Another recent survey, by Principal Financial, found that the average millennial expects to retire at 59. Other retirement surveys find millennials planning to work well into their sixties.
Can I retire at 65 with no savings? ›
You can still live a fulfilling life as a retiree with little to no savings. It just may look different than you originally planned. With a little pre-planning, relying on Social Security income and making lifestyle modifications—you may be able to meet your retirement needs.
How much does the average 65 year old retiree have in savings? ›
According to data from the Federal Reserve's most recent Survey of Consumer Finances, the average 65 to 74-year-old has a little over $426,000 saved.
How much does the average 70 year old have in savings? ›
How much does the average 70-year-old have in savings? We were curious, too, so we asked. Our 2023 Planning & Progress study found that the average amount of retirement savings for 70-year-olds in the U.S. is $113,900.
Can I retire at 65 with 500k? ›
The short answer is yes, $500,000 is enough for many retirees. The question is how that will work out for you. With an income source like Social Security, modes spending, and a bit of good luck, this is feasible. And when two people in your household get Social Security or pension income, it's even easier.
How many people have $1,000,000 in retirement savings? ›
Putting that much aside could make it easier to live your preferred lifestyle when you retire, without having to worry about running short of money. However, not a huge percentage of retirees end up having that much money. In fact, statistically, around 10% of retirees have $1 million or more in savings.
Is 100K in retirement by 30 good? ›
“By the time you're 40, you should have three times your annual salary saved. Based on the median income for Americans in this age bracket, $100K between 25-30 years old is pretty good; but you would need to increase your savings to reach your age 40 benchmark.”
What generation has the longest lifespan? ›
It is a known fact that lifespan increases with each generation. For baby boomers, the average life expectancy is 70 years, for Gen X its 85, and newer generations like Gen Z and Alpha will likely exceed the 100-year mark.
The average retirement age in the United States is 62, according to a 2024 MassMutual survey. In 1991, the average retirement age in the U.S. was 57; in 2002, it was 59, according to a 2022 Gallup poll.
Will Gen Z not retire? ›
Roughly one quarter (23%) of Gen Z don't expect to ever be able to retire, according to a recent McKinsey & Company study. This belief stems from a variety of factors, but a major reason is the current job market.
What is the average Social Security check? ›
As of March 2024, the average retirement benefit was $1,864.52 a month, according to the Social Security Administration. The maximum payout for Social Security recipients in 2024 is $4,873 a month, and you can only get that by earning a very high salary over 35 years.
What do people do with no retirement savings? ›
Individuals who have not saved for retirement and who still own homes can turn to their homes as a source of income. For some, this could mean renting a portion of their space as a separate apartment. Another option is to take a reverse mortgage on a home, although doing so can be costly and complicated.
What is it like to retire on almost nothing? ›
Roughly one in seven Social Security recipients ages 65 and older depend on their benefits for nearly all their income, according to an AARP analysis. Unable to maintain the lifestyle of their working years, they trim their already trim budgets, move into smaller homes, or rely on the kindness of relatives to get by.
How many people have $500,000 in retirement? ›
How much do people save for retirement? In 2022, about 46% of households reported any savings in retirement accounts. Twenty-six percent had saved more than $100,000, and 9% had more than $500,000. These percentages were only somewhat higher for older people.
What percentage of retirees have $3 million dollars? ›
Specifically, those with over $1 million in retirement accounts are in the top 3% of retirees. The Employee Benefit Research Institute (EBRI) estimates that 3.2% of retirees have over $1 million, and a mere 0.1% have $5 million or more, based on data from the Federal Reserve Survey of Consumer Finances.
How much net worth does average retiree have? ›
Typical Net Worth at Retirement
| Age Range | Median Net Worth | Average Net Worth |
|---|
| 55-64 | $212,500 | $1,175,900 |
| 65-74 | $266,400 | $1,217,700 |
| 75+ | $254,800 | $977,600 |
Oct 5, 2023
