America Has a Retirement Crisis. We Need to Make It Easier to Save (2024)

FAQs

America Has a Retirement Crisis. We Need to Make It Easier to Save? ›

We Need to Make It Easier to Save. Today, nearly 51% of Americans worry that they'll run out of money when they're no longer earning a paycheck—and 70% of retirees wish they had started saving earlier.

Another big part of the problem when it comes to saving for retirement is that savings plans are not universally available in the U.S. Almost half of private sector employees ages 18 to 64, or 57 million Americans, do not have the option to save for retirement at work.

Nearly half of all Americans are at risk of a financially insecure retirement, up from one in three workers in 1983. The average monthly Social Security benefit in 2023 was only about $1,782, or $21,384 annually.

But most people are far from reaching that objective, with the study finding that the average amount held in a retirement account today is just $88,400. That means that the typical worker has a $1.37 million gap between their actual savings and their retirement aspirations.

More than one-quarter of them have no retirement savings at all, according to a new study by the personal finance website GoBankingRates . The study surveyed more than 1,000 U.S. adults about their long-term savings, and the results were alarming: 28% had absolutely nothing saved for retirement.

Most American households have at least $1,000 in checking or savings accounts. But only about 12% have more than $100,000 in checking and savings.

In fact, statistically, around 10% of retirees have $1 million or more in savings.

Per the Federal Reserve about 6% of households have over $2,000,000 in wealth in 2020. What is let like to have a net worth of 2 million dollars? Depending on your lifestyle, not that different from the lives of most people.

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.

You can still live a fulfilling life as a retiree with little to no savings. It just may look different than you originally planned. With a little pre-planning, relying on Social Security income and making lifestyle modifications—you may be able to meet your retirement needs.

How many Americans have $0 in savings? ›

While it might be unsurprising and understandable that 28% of the adults ages 18-24 have no retirement savings, most older adults aren't doing much better. Between 25% and 35% of all demographics between the ages of 18 and 64 report having nothing saved for their golden years.

Get a Part-Time Job or Side Hustle. If you're contemplating retirement with no savings, then you may need to find ways to make more money. Getting a part-time job or starting a side hustle are two ways to earn money in your spare time without being locked into a full-time position.

The short answer is yes, $500,000 is enough for many retirees. The question is how that will work out for you. With an income source like Social Security, modes spending, and a bit of good luck, this is feasible. And when two people in your household get Social Security or pension income, it's even easier.

By some measures, millennials lag on retirement preparedness and net worth relative to older generations such as Gen X and baby boomers. There are many reasons for this, such as a shift away from pensions toward 401(k) plans and high student debt burdens.

Scammers stole more than $3.4 billion from older Americans last year, according to an FBI report released Tuesday that shows a rise in losses through increasingly sophisticated criminal tactics to trick the vulnerable into giving up their life savings.

Shapiro, finds that a majority of Americans who will turn age 65 between 2024 and 2030 are not financially prepared for retirement. Between 2024 and 2030, 30.4 million Americans will turn age 65. These Peak Boomers represent the youngest, largest, and final cohort of the Baby Boomer generation.