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 percentage of retirees have no retirement savings? ›
WASHINGTON—A new AARP survey finds that 20% of adults ages 50+ have no retirement savings, and more than half (61%) are worried they will not have enough money to support them in retirement.
How much will Gen Z need to retire? ›
The majority of Gen Z anticipates needing between $500,000 and $1 million. A higher proportion of millennials (26%) project they'll need between $1 million and $2 million, suggesting loftier financial aspirations or perhaps a more realistic appraisal of future economic conditions.
Which age group has the least amount saved for retirement? ›
Median retirement savings balance by age
| Age group | Median retirement savings balance amount |
|---|
| Under 35 | $18,880. |
| 35-44 | $45,000. |
| 45-54 | $115,000. |
| 55-64 | $185,000. |
2 more rowsMay 7, 2024
A somewhat more optimistic 14% of Gen Z and 8% of Millennials are aiming to retire between 40 and 50 years old. The most common answer was different for each group. For Gen Z, the largest group (33%) think they will retire between 61 and 70 years old.
How much does the average 70 year old have in savings? ›
The Federal Reserve also measures median and mean (average) savings across other types of financial assets. According to the data, the average 70-year-old has approximately: $60,000 in transaction accounts (including checking and savings) $127,000 in certificate of deposit (CD) accounts.
What percentage of retirees have $2 million dollars? ›
According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.
Are most retirees millionaires? ›
Most Americans retire with nowhere near $1 million in savings. The notion that we need that much money to fund a secure retirement arises from opinion polls, personal finance columns and two or three rules of thumb that suffuse the financial planning business.
How many people have $1,000,000 in retirement savings? ›
According to the Federal Reserve's latest Survey of Consumer Finances, only about 10% of American retirees have managed to save $1 million or more.
How much money does the average Gen Z have in savings? ›
Generation Z's Savings Account Balances
Although Gen Z is the least likely of any generation to have $100 or less in a savings account, Gen Zers are still likely to have relatively low savings overall — 56% of Gen Z has $1,000 or less in savings.
What is the average retirement income by state?
| State | Average retirement income |
|---|
| California | $34,737 |
| Colorado | $32,379 |
| Connecticut | $32,052 |
| Delaware | $31,283 |
47 more rowsFeb 28, 2024
Copy link. Social Security benefits are much more modest than many people realize; the average Social Security retirement benefit in February 2024 was about $1,862 per month, or about $22,344 per year. (The average disabled worker and aged widow each received less.)
What is the average amount Americans retire with? ›
Key Points. The median retirement savings for American households is $87,000. Median retirement savings for Americans younger than 35 is $18,800. 67% of Americans have a retirement account but only 34% feel on track for retirement.
How much do you need in retirement to live comfortably? ›
Some strategies call for having 10 to 12 times your final working year's salary or specific multiples of your annual income that increase as you age. Consider when you want to retire, goals, annual salary, expected annual raises, inflation, investment portfolio performance and potential healthcare expenses.
What age does Gen Z cut off? ›
What is Generation Z and the Gen Z age range? Generation Z, sometimes known as “zoomers,” is the demographic cohort that comes after millennials and proceeds Generation Alpha. Members of the Gen Z years were born between 1997 and 2012. So as of 2023, the Gen Z age range is anywhere from 11 to 26.
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.
How many 60 year olds have no savings? ›
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.
How do people retire with no 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.
How much does the average American have in non retirement savings? ›
The average American has $65,100 in savings — excluding retirement assets — according to Northwestern Mutual's 2023 Planning & Progress Study. That's a 5% increase over the $62,000 reported in 2022.
What percent of households over 55 have zero money saved for retirement? ›
Almost half (48%) of U.S. households headed by someone 55 or older have no retirement savings, according to U.S. Government Accountability Office's most recent estimates.
