Americans Reaching Retirement Age Least Prepared to Retire

Americans who are reaching retirement age now are in worse financial shape than the prior generation.

Standard of Living

According to the Wall Street Journal, more than 40% of households headed by people aged 55 through 70 lack sufficient resources to maintain their living standard in retirement.1

15 million households

That is the equivalent to about 15 million American households.1

Contributing Factors

There are several contributing factors for those aged 55 through 70 being unprepared for their upcoming golden years.

Debt

They have high average debt.1

Education

Often paying off children's educations.1

Aging Parents

Using savings to care for aging parents.1

401(k)

401(k) retirement funds will bring under $8,000 per year for a household of two.1

Financial Alternatives

Viable options for this age group are to work longer or lean on adult children for support.

Working Longer

Individuals will find themselves remaining at work past 70 or taking menial jobs as senior citizens.1

Financial Support

Others will rely more on children for funding, pressuring younger generations to jeopardize their financial stability.1

Workers Examine Retirement

American workers report their retirement outlook.

concerns

Seventy-six percent of workers last year expressed concerns that Social Security may not be in existence when they retire.2

Nest Egg

Only 20% strongly agree that they are building a large enough retirement nest egg.2

Workforce

Fifty-six percent of workers plan to continue working in retirement, either full-time (14%) or part-time (42%).2

Achieving a Comfortable Lifestyle

Generations report confidence in having a comfortable lifestyle in retirement.

Baby Boomers

Sixty-two percent of boomers are confident they will be able to fully retire with a comfortable lifestyle.2

Gen Xers

Fifty-five percent of gen xers believe they will achieve a comfortable retirement.2

Millennials

Sixty-seven percent of millennials are confident they will be able to carry over a comfortable lifestyle into retirement.2

Participation in Retirement Plans

A large number of employees participate in a defined contribution (DC) plan if offered to them.

DC Plans

Seventy-one percent of workers are offered a defined contribution plan.2

Participation

Among those offered a DC plan, 81% participate.2

Contribution

Those participating contribute an average of 10% of their salary.2

Source of Retirement Income

Americans are either betting on Social Security or defined contribution plan savings to be their primary source of retirement income.

Social Security

Thirty-nine percent of workers making less than $50,000 a year say that Social Security will be their primary source of income.2

DC Plans

By comparison, 38% of those making between $50,000 and $99,000 and 49% of those making $100,000 or more say their DC savings will be their primary source of income in retirement.2

Establish Where You Stand

With ProNvest, you can determine how much money you'll need to retire, where you're at today and what steps you can take to reach your goals.

And remember, update us of any significant lifestyle or financial changes so you remain on the right track no matter what your unique financial situation.

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Citation. 

1 – Americans are entering old age as the least prepared to retire in decades, 

https://www.businessreport.com/article/generation-americans-entering-old-age-least-prepared-retire-decades

2 – Only 20% of Workers Believe They Are Saving Adequately for Retirement, https://www.plansponsor.com/20-workers-believe-saving-adequately-retirement/