Nowadays, it is all too common to find news headlines on retirement. But not everything is as bright as one would expect.
The problem is:
Some people struggle to make ends meet after their career has ended. Others are shackled by mortgage debts they need to consider on top of their day-to-day expenses. The struggles of retirees are encapsulated in the latest retirement statistics.
Baby boomers, in particular, are facing tough times. Recent data shows the variety of challenges they need to overcome, which range from insufficient savings and rising healthcare costs to unrealistic expectations of what lies ahead.
And that’s not all:
The lack of preparation for their retirement years greatly contributes to the trying times people are going through. In fact, many experts have wondered whether there is a retirement crisis going on. The following data and statistics can give a clearer picture.
Here’s the deal:
We gathered the most important stats from reputable sources to give you a better understanding about the state of retirement in the country. Knowing what lies ahead and the various obstacles retirees face can be a huge boost when you get ready for the future. After all, sufficient preparation can minimize mistakes and help you enjoy your retirement years properly.
There are a lot of misconceptions about retirement. Experts and professionals often come up with blanket suggestions like “You should have so much in savings by age x,” which can sometimes make people panic.
The truth is:
Factors like lifestyle, location, and health make every person’s retirement needs unique. We’ve gathered a couple of retirement stats that can help you plan better for retirement, whether you’re a millennial or a baby boomer.
Only 62% of women can say the same for themselves, so they are clearly less prepared for retirement than men. According to statistics on retirement, women also spend more years as retirees due to their longer lifespans, which means they require higher savings. As a result, women have to seriously reconsider their retirement planning strategies.
One of the more depressing facts about retirement is that there is a sizable number of currently employed people out there – 8% of working Americans to be precise – who think they’ll never get to experience it.
Over half of them point to not having enough savings to retire. Meanwhile, 35% don’t plan to retire at all simply because they think not having to work might bore them.
If workplaces want their high-performing Gen X and millennial employees to stick around and receive opportunities to move up the career ladder, they need to take action sooner rather than later. Younger employees are alarmed by baby boomer retirement trends like putting off retirement to their later years.
As a result, up to 41% of working millennials have said it’s becoming much more difficult to get promoted at the workplace because baby boomers aren’t giving up the higher positions. This leads to a tendency for younger employees to hop from one job to another in search of better opportunities.
And no, Millennials and Gen Xers aren’t simply overreacting:
Recent retirement age statistics back up these concerns. These days, 1 in 4 Americans are still working even after the age of 65 – much higher than the ratio back in the 1990s.
Social security isn’t really that secure, so it’s important to have other sources of income for retirement.
Some even receive below a thousand dollars. That’s likely not enough for most retirees to live comfortably in their golden years. Most retirement savings statistics estimate that people should prepare for a thirty-year retirement period, and the savings figure usually suggested is $1 million dollars or roughly $2,800 a month.
Having a combination of personal savings, a private pension plan, and Social Security should be every retiree’s strategy. As mentioned above, the benefits retirees can expect to get from Social Security just won’t cut it. This is why getting a private pension plan and saving up should be part of anyone’s retirement game plan.
The sad news is:
Statistics on retirement savings in America show that only 23% of boomers are subscribed to a private pension plan.
Even though most baby boomers are putting off retirement, there are also those who want to retire early.
Some of you might be wondering:
How much should I have saved for retirement by age 55? In this economy, is it even possible?
The answer is not straightforward. Rather than saving up in some bank account, the recommendation from financial experts is to allot $3.45 million dollars in investments like stocks and bonds upon retirement to ensure that the yield amounts to $100,000 a year. If the amount seems too daunting, you can scale it down to $2.2 million, if you’re willing to stick to a more modest annual budget of $65,000.
But given that the average baby boomer retirement savings are sometimes nonexistent, this might be quite challenging. Taking into consideration all these facts, your retirement goal probably should be to diversify your sources of income and plan well.
Many Americans do not have savings and the reasons differ. However, it is found that about four out of ten Americans are too caught up with too many other expenses, contributing to their failure to save.
It is the number one reason why many of them do not have savings. Others, 16% to be exact, simply said they have not gotten around to saving yet, while another 16% blame their low-quality jobs. These retirement facts underline the sheer difficulty many Americans have to save for the future.
Since most retirees are now expected to live for another 30 years, their retirement savings should be able to sustain their living expenses and other needs like healthcare. If translated into dollars, the ideal nest egg for retirees should be approximately $1 million. Reality, however, paints another story. This becomes a primary concern for many who have come across some troubling retirement crisis statistics in the past few years.
Almost everyone has heard about the 4% rule. Also called the Bengen Rule, it was originally calculated using a 30-year retirement time-frame on how much one can withdraw from their portfolio when they retire. However, inflation, the rising cost of living, investment returns, length of retirement, and many other factors should also be considered when looking at retirement planning statistics.
Those planning for retirement can also consider the Rule of 25, which encourages many Americans to calculate their needed retirement savings by multiplying their total annual expenses by 25.
This rule often crops up when looking at the ideal income in retirement statistics. The total amount will determine how much they need to save by the time they retire. Those planning to spend $60,000 a year must set aside $1.5 million.
Union workers were more likely to avail of retirement benefits in 2019 than their nonunion counterparts. For many, these act as a cushion against the challenges of ending their career and losing their income source.
The thing is:
While savings are a must, retirement benefits can help alleviate some of the retiree’s fears. The United States retirement statistics state that union workers have better chances at retirement benefits than nonunion workers.
This gives them guaranteed retirement benefits. In contrast, only 17% of nonunion workers can avail of the same defined benefit plans.
30% of real estate agents are in the 60-plus age bracket, as underlined by most realtor retirement statistics. However, most of them do not have substantial plans for retirement. This is a concerning stat since many of them are getting closer to retirement age.
According to the recent Roth IRA statistics, Millennials opened 41% of new Roth IRA accounts in 2018. Income tax stats suggest 74% of their total contribution is going to Roths. Roth IRA is a retirement savings account that lets your money grow without paying for taxes since the contributions come from after-tax dollars.
Perhaps somewhat surprisingly, the majority of workers across three generations have positive associations with retirement. They cite words such as “freedom,” “enjoyment,” and “stress-free.” Their retirement plans involve traveling, pursuing hobbies, and spending more time with family and friends
Growing up in an era when employment was readily available, baby boomers are perhaps better off than the generations that followed. Their income rate, according to a senior fellow at the Center for American Progress, was growing at the rate of 2% a year. This is quite impressive, especially when compared to the present times.
So, this is one of the answers when this very common question pops up:
What is the baby boomer generation known for?
They grew up at the time when everything looked peachy and bright, something that the younger generation did not get to enjoy. They might have done a fairly good job of ensuring that the Social Security and Medicare are protected at retirement, but they failed to make sure it is fully funded for future generations.
That is why it is quite interesting to see how baby boomers fair when it comes to the question of retirement. Here are some stats to help you understand:
People who were born in the baby boomer generation are now either in retirement or fast approaching these golden years. In fact, there are some 10,000 baby boomers who are turning 65 every day. This brings the baby boomer retirees’ number to 34 million as of 2019.
As more and more of their ranks enter the retirement age, the retirement problems of baby boomers are also becoming more apparent. A report by the Wall Street Journal concluded that baby boomers are reaching retirement in worse financial shape compared to the previous generation.
One study reports that close to half of them have failed to save for retirement. Of the 55% who did have savings, 28% have less than $10,000. This would mean half of the retirees will have to rely on their Social Security benefits.
Credit card debt is one of the problems that trouble most baby boomers later in life, recent retirement facts and statistics reveal. A survey conducted by Clever, a real estate company, found that four out of ten baby boomers are still in the process of settling their credit card debt.
Having a pre-retirement debt hinders most of them from saving enough for the future, jeopardizing their chances of a financially secure retirement. Those who are in the process of ending their career and retiring would not be able to add to their nest egg because most of the income will have to go to their monthly debt payment. Add in the day-to-day expenses, and you’ll see why baby boomers have a real problem on their hands.
The US retirement statistics are a bit dire for many baby boomers, with just over half of them having to make monthly mortgage payments in their retirement. The average monthly homeownership can cost $1,200, which can chip away at their savings and affect their budget every month, posing concerning problems for many retirees.
There are concerns about how baby boomers retiring will affect the workforce in the coming years. Baby boomers are said to have outpaced the labor engagement market of the Silent Generation and the Greatest Generation when they were the same age, according to the data compiled by Pew Research.
According to recent retirement statistics, Around 29% of baby boomers aged between 65 and 72 were still part of the workforce in 2018. So, companies are worried about the cost of older workers and the challenge of finding replacement for skilled and knowledgeable older workers.
Aging baby boomers are facing more challenges, as evidenced in baby boomers retiring stats. From 1.3 million Americans in nursing homes, the number will go up to 2.3 million in 2030, projecting an increase of 75%. The baby boomer generation is expected to reshape America’s older population.
While baby boomers are expected to live longer lives, there potential concerns about chronic diseases. Alarmingly, obesity rates are found to be increasing among older adults. This is another retirement statistic that needs to factor when planning for their old age.
Since life expectancy has surpassed that of the 1990s, the problem now lies in being better prepared for retirement. There is an increasing trend in rising healthcare costs, which means baby boomers need to stretch out their savings. In fact, $140,000 can only cover four years of medical expenses, as stated by some baby boomer retirement statistics in 2018.
Here’s the scoop:
In order to alleviate worry and be better prepared for the unexpected, baby boomers must adjust their retirement savings. They must exhaust every option available at their disposal, creating viable retirement plans that will not only secure their future but also ensure that they get to enjoy the kind of lifestyle they have in the present once they retire.
These baby boomers retirement statistics are a good yardstick and guide for those who are nearing the retirement age or have already started their golden years. It does not hurt to be prepared by looking at the facts and trends on retirement in the past several years. As new challenges appear, people will be able to take on any difficulty that may arise due to the changing times.
A: According to the Bureau of Labor Statistics (BLS), retiree households make about $48,000 a year (before deducting tax). If inflation and the rising costs of living are taken into consideration, this amount can hardly help them get by every year. Once the additional costs of health care and nursing home enter the picture, the outlook for many retirees can be quite grim.
Retirement income statistics gathered by the BLS explain that retirees’ funds come from a variety of sources, but most of the time, half of the income is made up of Social Security benefits, plus pensions that are either private or from the government. A smaller portion of this $48,000 comes from miscellaneous passive income, like renting out property, investment yields, and interests from savings accounts.
A: 401k statistics from 2018 place the average figure at $95,600. Despite this being the average, nest eggs can vary widely across various generations. Obviously, baby boomers who have been employed and contributed for much longer tend to have higher 401k averages compared to Millennials or Gen Xers, with the figure reaching over $250,000 for a large number of boomers.
A: Retirement stats from the AARP reveal that 10,000 baby boomers reach the retirement age of 65 every day. The organization also expects this rate to remain constant until 2030. Of course, this doesn’t mean all these boomers retire on the day they turn 65, but it is still a good indicator of how many boomers will likely retire each year.
So, as to how many baby boomers are retiring in 2019, we can place the approximate figure at roughly three million.
A: This question can be quite hard to answer, as the concept of “enough” can vary for each person. A 2019 study by insurance company Northwestern Mutual reveals that 56% of Americans don’t even know what should be considered “enough” for their retirement.
Regardless, 10% are confident enough that they will have saved enough by the time they retire.
If we go with most financial experts’ general recommendation of having $1 million dollars in your savings account, average retirement savings statistics will show that only a small percentage of Americans can meet this recommendation. To illustrate, 22% of Americans only have $5,000 in savings.
An even bleaker statistic is that 15% don’t have any retirement savings at all. This poses alarming problems in the later years when they have to make do with what they have for their basic needs and other expenses.
Baby boomer retirement savings fare a little bit better than the overall figure, with only 17% having less than $5,000. However, many baby boomers still prefer to work even after they retire. Their skills and knowledge are valued by their employers. This also gives them the opportunity to stretch out their savings and alleviate the significant effects of inflation, not to mention the high cost of living and medical care.
A: If we base it solely on the number of retirees receiving Social Security benefits, there are 43.7 million retired Americans. The actual number is probably higher than this, but more or less it translates to 13% of the 2018 population of the United States.
What does this mean?
The more retirees leave the workforce, the more budget is needed for their retirement benefits. Many are concerned that there will be insufficient funds to support the current generation of retirees.
Only the 2018 retirement statistics are available. More research and studies will be conducted to look at the current state of retirement in the country. Various agencies and private organizations aim to have updated statistics in place to gauge the problems and how they can be addressed.
But, given that growth hasn’t jumped up drastically for the past several years, the retirement statistics in 2019 will also probably not deviate greatly from the 2018 figures. However, it is still a great idea to monitor the changes and take note of them.
A: Taking into account the great variety of factors at play, the average person has $374,000 in their retirement account. The figure does not include those who did not have any savings from the calculation.
But when one calculates the median retirement accounts including those who are without retirement savings, the picture becomes considerably bleak.
A: A survey conducted by the Transamerica Center for Retirement Studies found that the median retirement savings for an average American in their 60s is around $172,000. Considering the day and age we are in, this amount is not enough if we are talking about 10 or more retirement years. After all, there are a lot of things to consider, from basic daily needs to healthcare and nursing home costs.
A: Moving on to the average 65-year-olds, it can be quite shocking to find that they only have around $358,000 in their retirement accounts.No wonder many choose to stay in the workforce even when they are already over 65 years old.
A: On average, baby boomers who managed to save have around $200,000. This is very far from the ideal nest egg required to carry them through a 30-year retirement which is more than $1 million. Many baby boomers exit the workforce unprepared, and this can be quite a challenge in a few more years when they have depleted what little they have in their retirement savings account.
Retirement in the US is getting more and more challenging as time goes by. These retirement statistics attest to that, providing ample insight into the problems and obstacles millions of retirees have to face. Knowing all of these can help you plan for the future, ensuring that you will have secure and peaceful golden years.