Here’s How Much Retirees Actually Have in Savings (Hint: It’s Not Enough)
It’s long been a rule of thumb that you should have $1 million saved before you retire — and you may actually need to have close to double that in many cases.
See: 6 Types of Retirement Income That Aren’t Taxable
Related: 3 Ways To Recession-Proof Your Retirement
But most retirees have far less. A recent survey conducted by Clever found that, on average, retirees have just $170,726 saved for retirement. Here’s a closer look at the alarming financial state of retirees in America.
Many Retirees Believe They Will Outlive Their Savings
According to the survey, 48% of retirees believe they’ll outlive their savings entirely — which is not too surprising given how little many have saved for retirement.
In addition, 57% said they were surprised by how much money it takes to retire — the minimum recommended amount is roughly $555,000, or 10x the U.S. median income.
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Nearly 2 in 5 Retirees Have No Retirement Savings
The survey found that about 37% of retirees say they have no retirement savings, up from 30% in 2022, and only about 12% have at least the recommended $555,000 in savings.
The high percentages of retirees with little to nothing saved may have to do with factors beyond their control.
“We’ve certainly seen multiple health, environmental and financial crises surface in the last few years — all of which have increased financial strain on Americans,” said Taelor Candiloro, research analyst at Clever Real Estate. “There are also a plethora of social and economic variables that impact how Americans are able to accumulate wealth during their working years. All of these things collectively impact our ability to save for retirement — or our ability to retire at all for that matter — and could contribute to the lack of savings retirees are reportedly experiencing.”
Another factor could be the lack of access to employer-sponsored retirement savings plans. Nearly half of retirees (47%) said that their company didn’t offer 401(k) plans or pensions.
Retirees Are Counting on Social Security Income To Make Ends Meet
Without retirement savings, retirees are dependent on other income streams to cover their everyday expenses. The most common source of retirement income among retirees is Social Security, with 79% of those surveyed citing it as a source of income. However, the average monthly Social Security payment is just $1,692, which likely is not enough for most retirees to cover their expenses.
“Retirees may be relying almost entirely on their Social Security payments, which can get precarious, especially since [71%] of retirees reported carrying debt through their retirement,” Candiloro said.
Nearly Three-Quarters of Retired Americans Have Non-Mortgage Debt
Because so many retirees have little to no savings, it’s not too surprising that the majority are carrying debt. The most common types of debt held by retirees are credit card debt (49%), mortgages (24%), car payments (20%) and medical bills (18%).
“Being in a financial situation where you’re required to allocate some of your monthly funds towards things like credit card payments can impact your savings long term and mean that your standard of living decreases once you retire,” Candiloro said. “[Fifty-five] percent of retirees reported spending less on travel after retiring, and [54%] said they spend less on dining out, while [27% of] retirees reported spending more on medical bills and health care.”
It’s Never Too Late To Build Retirement Savings
Most retirees said they have regrets about their savings, with 67% wishing they better understood retirement savings when they were working and 57% saying they waited too long to start saving for retirement. Although it may feel too late, it’s better for retirees to start investing in their retirement savings now than not investing at all.
“You can always invest, and every dollar counts,” Candiloro said. “If you’re already retired but want to boost your savings, building a relatively safe or mixed investment portfolio can help to build a reliable stream of income to contribute to your bills and expenses.”
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This article originally appeared on GOBankingRates.com: Here’s How Much Retirees Actually Have in Savings (Hint: It’s Not Enough)
