Worried about retirement? You are not alone. A large number of workers nearing the end of their careers are learning that retirement is expensive and that older Americans simply are not prepared. If you are thinking of retiring in the not-so-distant future, here are a few facts you should be aware of.
1. The Average Baby Boomer has $163,577
The average household aged 56 has amassed a nest egg of $163,577. That number is actually pretty scary. Over a retirement period of 20-years, $163,577 amounts to just $681 a month.
Furthermore, $163,577 is just the “average” savings among baby boomers nearing retirement. The median savings for that age group is just $17,000, which means a large number of retirees have far less than the average.
2. 41% of Baby Boomers Have No Retirement Savings
About 41% of households aged 55–64 have no retirement savings at all. An estimated 21% of Social Security recipients rely on their benefit checks to provide all of their income.
3. Social Security Pays $1,360 a Month
Social security monthly benefit checks are not nearly enough to help the typical retiree pay the bills. Currently, the average beneficiary gets $1,360 a month, or an annual income of $16,320. That is hardly enough to live on.
4. 1 in 4 Seniors Will Live Past 90
Forget about saving for a 20-year retirement. Seniors are living longer. One in four 65-year-olds will live past the age of 90, while one in 10 will live past 95.
5. Retired Households Spend More Money, Not Less
Many older Americans think their expenses will go down at retirement. Almost half of retirees wind up spending more money once they stop working, not less. 46% of retired households increase their spending after retiring, and for 33%, this pattern continues for six years.
6. Healthcare Will Cost $377,000 in Retirement
When you factor in typical out-of-pocket costs not covered by Medicare (dental and vision), the average retired couple is looking at $377,000 in healthcare costs. Not only that, the $377,000 does not even take long-term care costs such as for nursing homes into account.
7. 30% of Homeowners 65+ Still Have a Mortgage
Some people think they can get away with less in retirement because they will not have a mortgage. However, 30% of homeowners 65 and older still have a mortgage.
8. 25 Million Seniors Live Below the Poverty Line
Rising medical costs, housing costs, groceries, and utilities leave many seniors in perpetual financial vulnerability. Over 25 million senior Americans are below the federal poverty level.
9. 25% of Workers Expect to Retire at 70+
Due to the cost of retirement and collective lack of savings, many have no choice but to extend their careers. Almost 25% of Americans think they will not be able to retire until age 70 or older. Even worse, 5% do not think they will ever manage to retire at all.
10. 9 Our of 10 Retirees are Happy
90% of retirees said that they are enjoying their lives despite the financial challenges of retirement. If you are among the countless older workers who are behind on savings, you do not need to resign yourself to an unsatisfying retirement!