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
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
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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