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
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.
What percent of people over 55 have no money saved for retirement? ›
According to U.S. Census Bureau data, 50% of women and 47% of men between the ages of 55 and 66 have no retirement savings.
Do most retirees run out of money? ›
The survey examined their visions of aging and retirement, when and how retirement happens, life in retirement and their finances. “Our research finds that retirees are happy, purposeful and have a positive view of aging. However, many are financially vulnerable and risk running out of savings.
What is the percentage of people that don t have a retirement plan? ›
About 69 million workers, or 56% of the nation's workforce, lack access to a retirement plan through their workplace, the Economic Innovation Group found in its analysis of 2021 Census data.
How much does the average 65 year old have in retirement savings? ›
Average retirement savings balance by age
| Age group | Average retirement savings balance amount |
|---|
| 35-44 | $141,520 |
| 45-54 | $313,220 |
| 55-64 | $537,560 |
| 65-74 | $609,230 |
1 more rowMar 5, 2024
The above chart shows that U.S. residents 35 and under have an average of $30,170 in retirement savings; those 35 to 44 have an average $131,950; those 45 to 54 have an average $254,720; those 55 to 64 have an average $408,420; those 65 to 74 have an average $426,070; and those over 70 have an average $357,920.
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.
How much money does the average retiree have in the bank? ›
The Federal Reserve's most recent data reveals that the average American has $65,000 in retirement savings. By their retirement age, the average is estimated to be $255,200.
What is the average income for most retirees? ›
Average Monthly Retirement Income
According to data from the BLS, average 2022 incomes after taxes were as follows for older households: 65-74 years: $63,187 per year or $5,266 per month. 75 and older: $47,928 per year or $3,994 per month.
How many people have $1,000,000 in retirement savings? ›
In fact, statistically, around 10% of retirees have $1 million or more in savings. The majority of retirees, however, have far less saved. If you're looking to be in the minority but aren't sure how to get started on that savings goal, consider working with a financial advisor. What Does the Average Retiree Have Saved?
Social Security offers a monthly benefit check to many kinds of recipients. As of December 2023, the average check is $1,767.03, according to the Social Security Administration – but that amount can differ drastically depending on the type of recipient. In fact, retirees typically make more than the overall average.
How many Americans have $100,000 in savings? ›
Most American households have at least $1,000 in checking or savings accounts. But only about 12% have more than $100,000 in checking and savings.
What percentage of retirees live only on Social Security? ›
A plurality of older Americans, 40.2 percent, only receive income from Social Security in retirement. Roughly equal numbers of older Americans receive income from defined benefit pensions as from defined contribution plans.
How much do most Americans retire with? ›
Key findings
- In 2022, the average (median) retirement savings for American households was $87,000.
- Median retirement savings for Americans younger than 35 was $18,800 as of 2022.
- 62% of Americans aged 18 to 29 have some retirement savings, but only 30% percent feel on track for retirement.
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
You expect to withdraw 4% each year, starting with a $24,000 withdrawal in Year One. Your money earns a 5% annual rate of return while inflation stays at 2.9%. Based on those numbers, $600,000 would be enough to last you 30 years in retirement.
What percentage of Americans have $0 saved for retirement? ›
The financial services company surveyed more than 1,000 Americans regarding their retirement savings. Twenty-eight percent of respondents said they have $0 set aside for their later years.
Is 55 too late to save for retirement? ›
If you're between 55 and 64, you still have time to boost your retirement savings. Start by increasing your 401(k) or other retirement plan contributions if you aren't already maxed out. Consider whether a bigger pension or a higher Social Security benefit is worth working a little longer.
What percentage of 55 year olds are retired? ›
Retirement rates have declined, especially among older adults
| Age | Percentage Retired, 2002-2007 | Percentage Retired, 2016-2022 |
|---|
| 50-54 | 9% | 6% |
| 55-59 | 19% | 11% |
| 60-64 | 41% | 32% |
| 65-69 | 76% | 70% |
4 more rowsIf you didn't make saving for retirement a priority early in life, it's not too late to catch up. At age 50, you can start making extra contributions to your tax-sheltered retirement accounts (called catch-up contributions). Younger workers can only contribute $23,000 to their 401(k)s and $7,000 to their IRAs in 2024.
