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."
Saving for retirement is an important financial step, but it’s difficult to do if you’re burdened by debt. If you would like to get a sense of what debt consolidation loan options are available to you, visit Credible to compare rates and lenders.
SOCIAL SECURITY IS COMING FOR A BIGGER CHUNK OF YOUR PAYCHECK
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FAQs
1 in 5 adults ages 50+ have no retirement savings, and more than half are worried they will not have enough money to support them in retirement, according to a new AARP survey. The study reflects concerns amid a shaky economy, high prices and an uncertain future.
Do Gen Z have no savings? ›
Saving Struggles
Gen Z continue to struggle with building savings and contributing to their retirement. Over half (57%) of respondents do not have enough emergency savings to cover three months of expenses. Nearly one-third (30%) feel they don't make enough money to save.
Is $1 million enough to retire at 60? ›
With $1 million in a 401(k) and no mortgage on a $500,000 home, retirement at 60 may, in fact, be possible. However, retiring before eligibility for Social Security and Medicare mean relying more on savings. So deciding to retire at 60 calls for careful planning around healthcare, taxes and more.
How many people have $1,000,000 in savings? ›
Employee Benefit Research Institute (EBRI) data estimates that just 3.2% of Americans have $1 million or more in their retirement accounts. Here's how much most Americans have saved and what you can do to boost your retirement savings. Don't miss out: Click to see our list of best high-yield savings accounts.
What to do if you're 60 with no retirement savings? ›
So if you've reached age 60 with nothing saved, consider extending your career a bit more. Doing so gives you more time to build savings and create a financial cushion for your senior years. In fact, if you're willing to work until you're 70, that gives you 10 years to fund an IRA or 401(k).
What percentage of Americans have $0 saved for retirement? ›
Retirement 2024: 28% of Americans Have $0 Saved for Their Golden Years. Many Americans are stumbling toward golden years that will be heavily tarnished.
How much does Gen Z need to save to retire? ›
For a "comfortable retirement," 8% of Gen Z and 14% of Millennials think less than $500,000 would be enough. However, the majority of Gen Z (37%) believes they'll need between $500,000 to $1 million, while a quarter of Millennials (26%) think they'll need more, between $1 million but less than $2 million.
What percent of Gen Z has savings? ›
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 does Gen Z spend the most money on? ›
Gen Z spend most of their money on household bills and expenses, with 52.3% saying they spent the most money on these costs. 17.2% of Gen Z don't think they'll ever have enough money to buy their own home. The estimated average amount Gen Z spends on socializing is $166.75 per month, totaling $2,000 a year.
How long does $1 million last in retirement? ›
For example, if you have retirement savings of $1 million, the 4% rule says that you can safely withdraw $40,000 per year during the first year — increasing this number for inflation each subsequent year — without running out of money within the next 30 years.
Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.
How to retire at 60 with no money? ›
If you retire with no money, you'll have to consider ways to create income to pay for your living expenses. That might include applying for Social Security retirement benefits, getting a reverse mortgage if you own a home, or starting a side hustle or part-time job to generate a steady paycheck.
What is the average net worth of retirees? ›
What Is the Average Net Worth for Retirees? According to the latest data from the Federal Reserve, the median net worth for Americans aged 65 to 74 was $409,900. For those 75 and older, it was $335,600.
How much does the average 75 year old have in savings? ›
Here's how much the average American has in retirement savings by age
| Age Range | Median Retirement Savings |
|---|
| 45-54 | $115,000 |
| 55-64 | $185,000 |
| 65-74 | $200,000 |
| 75 or older | $130,000 |
2 more rowsMay 5, 2024
The poll also found that among those who have been saving for retirement, 6.7% have saved between $10,000 and $49,999, 12.6% have saved between $50,000 and $99,999, 12% have saved between $100,000 and $199,999, 9.9% have saved between $200,000 and $299,999 and 16.5% have saved $300,000 or more.
How much does the average American have in non retirement savings? ›
Frequently asked questions (FAQs) How much does the average American have in savings? Excluding retirement assets, the average American has $65,100 in savings, according to Northwestern Mutual's 2023 Planning & Progress Study.
What percent of people over 55 have no money saved for retirement? ›
About 50% of women ages 55 to 66 have no personal retirement savings, compared to 47% of men.
How many retirees are debt free? ›
Nearly 65% of Americans 65 to 74 held debt in 2022, compared to about half of seniors 75 and older who held debt. In comparison, less than half of the population aged 65 to 74 held debt in 1989. That same year, only 21% of older adults 75 and up were in debt.
What percent of Americans do not have a retirement plan? ›
Just 54% of Americans had a retirement account as of 2022, according to the SCF, which is published every three years. Their typical balance was $87,000, as measured by the median value. The picture isn't much different for those who are on the precipice of retirement.
