Scary Retirement Statistics

11 Scary Retirement Statistics That Will Keep You Up at Night

Updated on Nov 02 2018


Americans are retiring in record numbers, yet many of them are not prepared financially for retirement and end-of-life costs. These scary retirement statistics are so frightening they will keep you up at night if you’re not being proactive to prepare for your retirement and long-term care and living costs.

Many Americans, run out of money by the end of the month. They earn plenty, but still live paycheck to paycheck. A recent poll from SunTrust Bank, showed that many Americans, even those with high incomes, are not saving money. Hard times aren’t necessarily the culprit. According to the poll survey, which focused on families who pulled in more than $75,000 per year, 44 percent of those living paycheck-to-paycheck blamed their money woes on lifestyle spending expenses, such as dining and entertainment.

Americans also claim a “lack of financial discipline holds them back from achieving their financial goals,” according to the poll, which is especially scary since Americans can’t rely on their employers or the government for their retirement plan these days. Diligent financial and retirement planning are more crucial than ever before, yet many are still not thinking about their financial futures.

Here are eleven scary retirement statistics you’ll want avoid:

1. One in three Americans has no retirement savings.

More than half of Americans have less than $10,000 saved for retirement. A recent survey from GoBankingRates.com found over half of Americans have no more than $10,000 saved for retirement, and one in three have nothing saved at all. The National Institute on Retirement Security estimates the nation’s retirement savings gap is between $6.8 and $14 trillion.

2. More than half of Americans are forced into an unexpected early retirement.

More than half, or 58 percent, of Americans 70 years old and under who have already left the workforce did so earlier than they had planned with 40 percent retiring early because of health-related issues and 26 percent because of lost jobs, according to a PNC Financial Services survey.

While some Americans expect to work longer to make up the shortfalls in their savings, many of them find themselves retiring before they are prepared. It’s important to prepare for the unexpected with a strategic retirement plan.

3. 61 percent of Americans have no retirement plan.

Most Americans have no clue how much money they need to retire. According to a recent Bankrate survey, Americans don’t know how much money they’ll need to save for retirement and 61 percent of Americans don’t have a retirement plan. This includes nearly three-fifths of every adult generation over age 37.

4. 62 percent of baby boomers are expecting too much from Social Security.

By 2033, Social Security will need to be cut by 23 percent as funds are running out with the Silver Tsunami financial drain on the Federal government, according to the NHP Foundation. Since Social Security is the most commonly cited source of income for retirees, this is quite scary.

Nobody knows what Social Security will look like in a few decades. Without reform, benefits will likely need to be cut by 23 percent in aggregate in 2033, according to the Social Security Administration. In other words, after the depletion of reserves, tax income will only be able to pay 77 percent of scheduled benefits in 2033. This is especially terrifying, considering Social Security keeps nearly 27 million Americans above the poverty threshold, as estimated by the Economic Policy Institute.

5. Women are 27 percent more likely to have no retirement savings.

Women must save 18 percent while men need to save 10 percent to reach the same financial level in retirement, according to data from the Bureau of Labor Statistics. The gap between men’s and women’s retirement savings equates to as much as 27 percent. Nearly two-thirds of women have nothing saved or less than $10,000 in retirement savings, compared to 52 percent of men. In fact, according to a recent Time.com article, it’s harder for women to save in general, as they make $0.79 for every dollar men make in full-time positions. Not only that, many women are forced to leave full-time jobs earlier for caregiving and other family responsibilities.

6. Enabling children financially is taking a big toll on retiree income.

Many American households are having trouble saving for retirement and enabling grown children is one of the main culprits. In fact, after children are done with college, the expense continues for many American families.

Baby boomers with financially independent adult children who don’t support anyone else are twice as likely to be retired, according a survey of 5,500 U.S. households by the market research firm Hearts & Wallets. Only 21 percent of boomers who support adult children are fully retired, compared to 50 percent of boomers who don’t support children or other extended family members.

7. People are outliving their retirement portfolios.

The average retiree can expect to spend nearly two decades in retirement. The Administration on Aging reports that adults aged 65 have an average life expectancy of an additional 19.2 years; 20.4 years for females and 17.8 years for males.

A healthcare study by the Journal of General Internal Medicine noted that end-of-life medical expenses, in the last 5 years of life, range from $38,000 to over $100,000 depending on individual needs and the level of care provided. Sadly, many retirees’ retirement portfolios are not structured to cover growing medical costs in later years.

8. Student loan debt quadrupled for aging Americans.

Between 2005 and 2015, the number of Americans 60 or older with student loan debt quadrupled, according to a 2017 Consumer Financial Protection Bureau study. When you have loan debt in your latter years, it’s more difficult to save for retirement.

9. 76 percent of baby boomers aren’t confident they’ve saved enough for retirement

According to a survey by the Insured Retirement Institute, a large majority of baby boomers doubt their financial future. Of those lacking confidence, 68 percent wish they’d saved more and the majority of seniors wish they would’ve started saving earlier. More than half those surveyed said they need Social Security to make it through retirement.

10. The number of seniors declaring bankruptcy has grown to 7 percent

In 1991, only 2.1 percent of those filing for bankruptcy were 65 or older, according to the Employee Benefit Research Institute. This number climbed to 7 percent by 2007. This is a scary number considering the limited options seniors have to make money. In fact, this situation is extra challenging for seniors without a job or income stream get credit, buy cars or rent a house, if needed.

11. A couple will spend an estimated $245,000 on healthcare throughout retirement

About 70 percent of 65-year-olds eventually need some form of long-term care. A private room in a nursing home costs around $7,698 a month, according to 2017 Genworth data, and many retirees are falling short in monthly income.

Fidelity research found that a couple who retired in 2015, both aged 65, will spend an estimated $245,000 on healthcare throughout retirement. That’s up from $220,000 in 2014 and $190,000 in 2005. Longer life expectancy and anticipated annual increases for medical and prescription expenses are primary factors, which is why it’s so important to budget for long-term healthcare when planning for your retirement.

Be Proactive With Your Retirement Planning

To be able to manage spend effectively, you have to control excessive lifestyle splurges as well as diligently track your spend. Find out how to survive scary statistics with Senior Finance Advisor. An expert financial advisor can help you determine what investment and savings plan makes sense for your unique situation.

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