No matter whether you have a retirement plan or not, our retirement statistics are going to do you good. They may even shock you and show you that you’re on route to experience a real retirement crisis, or perhaps they’ll prove that you’re on the right track with your savings for retirement.
They say it’s never too early to save for retirement, and we couldn’t agree more. That doesn’t mean you should strip yourself of some pleasures that you relish so much.
It simply means you should get some knowledge about how much is enough to save, what options are out there, what baby boomers are up to, or if it’s a good idea to work during your retirement.
Here are the most vital stats to remember:
Top 10 Surprising Retirement Statistics for 2022
- 71% of employers believe their employees meet all the conditions for a good retirement.
- In 2020, Americans’ retirement readiness index amounted to 6.7.
- Only 29% of big companies guaranteed health benefits to their retirees in 2020.
- The average household retirement income in 2021 amounts to $56,632 (median income), i.e., $84,153 (mean income).
- 22% of workers have no idea how US retirement funds work or where the retirement money is invested.
- One in three retirees is indebted, retirement statistics from 2019 reveal.
- 54% of Americans put their trust into 401(k) plans when it comes to their retirement saving account.
- 45% of Boomers don’t possess any retirement savings.
- About 28 million Baby Boomers decided to retire in the third quarter of 2020.
- 70% of Baby Boomers have less than $300,000 in savings.
Now, let’s see this in greater detail, as well as some practical advice.
Get to Know Basic Retirement Facts
When do people usually retire, and how high are their retirement incomes?
1. 71% of employers believe their employees meet all the conditions for a good retirement.
(Transamerica)
However, there’s a general discrepancy with the employees’ own opinion, as fewer of them (64%) believe they will have enough to maintain a comfortable lifestyle.
2. Based on retirement readiness statistics from In 2020, Americans’ retirement readiness index amounted to 6.7.
(Statista)
The figures show us this was a significant increase compared to the previous years. For instance, in 2012, Americans stood at 5.57 points on the index, while in 2019, they had 6.6 points.
How does the readiness index work? Simply, it uses a scale with scores, starting from number 1, indicating the lowest score, and number 10, which shows the highest score (or level of preparation).
3. Once you retire, you have about 20 years left to live, on average, according to government estimates.
(USA.gov) (The Balance)
The U.S. Census retirement statistics show that the average retirement age is 65 for men and 63 for women.
When is the right time to retire? It depends on the circumstances. For example, if you live in a state with higher living standards, like New York, California, or Hawaii, early retirement might not be the best choice due to the high cost of living.
4. Military retirement statistics point to a relatively slight increase in the upcoming years.
(Statista)
Everything looks nice and steady when you look at the graph depicting the increase in military retirees. Hence, there should be about 2.28 million ex-soldiers by 2031.
Currently, in 2021, there are about 2.19 million retired military personnel.
5. Only 29% of big companies guaranteed health benefits to their retirees in 2020, US retirement statistics reveal.
(Statista)
The surveyed firms have 200 or more employees. Similarly, statistics regarding healthcare show that 28% of the retired are “very sure” they will have enough money to cover their medical expenses.
6. Social security benefits can be collected the moment you turn 62, but that’s not the best decision.
(Investopedia)
If you do that, you’ll get 25% less of the monthly amount that you were supposed to get.
On the other hand, should you decide to claim social security benefits when you turn 70, this will grant you an extra 8% per year, contributing to favorable retirement income statistics.
That’s a pretty neat sum when you do the math. In addition, that will continue for the remainder of your life! Therefore, patience is key.
7. One in three retirees is indebted.
(Yahoo Money)
However, it’s not just their poor money management that is in question. Apart from mortgages, credit cards, and car loans, retirees are paying off their children’s debts and even grandkids. For example, student loans because they didn’t know how to choose the right lender.
8. According to the retirement statistics from 2018, the average retirement income was $48,000 (before taxes).
(Nasdaq)
One part of the household income came from Social Security, which in 2018 paid out around $1 trillion. Conversely, a retired household spent about $46,000 per year.
9. The average household retirement income in 2021 amounts to $56,632 (median income), i.e., $84,153 (mean income).
(NewRetirement)
Although the numbers might seem reasonable and “above average,” they don’t reflect the whole picture. For example, retirement facts show us that both median and mean income differ when it comes to age.
In other words, households aged 45–49 have a median income of $93,393, followed by a mean income of $127,519, whereas households aged 75+ have smaller incomes — $37,335 (median income), i.e., $58,644 (mean income).
The same difference can be observed in other age groups.
10. Retirement statistics show 80% of retirees-to-be believe they will continue working even when they retire.
(EBRI)
Nevertheless, they do the exact opposite! Only 28% of them actually continue working for a monthly paycheck.
The reasons for this vary. It might be just that they truly start enjoying their retirement days and have enough means to live comfortably, or that the age and health issues prevent them from realizing their intention.
Though, what we do know is that they don’t add up too much to freelance statistics.
11. Retirement facts from 2019 state only 21% of employees had a pension plan.
(Annuity)
At the same time, 56% of employees had a workplace retirement plan, while 43% had a retirement savings plan. Furthermore, 77% of Americans believe that employers need to be more invested in their workers’ retirement plans.
When it comes to social security benefits, 45.1 million retired workers reported receiving them. That’s +11.6 million people compared to 2009 when 33.5 million retired workers received social security benefits.
12. Retirement saving statistics would be better if everyone checked their retirement investments once a year.
(CNN Money)
Why should we check up on our retirement funds? Because of our needs, the amount we ought to invest, changes with age, and our income.
The more you earn, the more you should make use of that money, and we’re not talking about expensive lunches or big holidays. See if you can invest that money wisely, be it your retirement fund, savings account, or buying stocks.
13. The UK retirement trends from 2020 indicate that 61% of Brits expect their state pension to be their primary source of income.
(SevenCapital)
Only 23% of Brits believe they will have enough money to live comfortably when they retire. 34% are ready to continue working or even get a second job by working from home.
Moreover, 30 million Brits (80%) believe they are not saving enough money for their retirement. Therefore, they rely heavily on their property as an additional source of income.
14. Realtor retirement statistics suggest that 68% of real estate agents don’t plan on retiring.
(Real Estate Career)
Real estate agents have more flexibility when it comes to working. Hence, only 3% plan to retire between the age of 66 and 70.
The statistics also suggest 6% of real estate agents aged between 61 and 65 are ready to retire, followed by 8% of people younger than 55 and 14% of people between 55 and 60.
Statistics on Retirement Savings in America
How much do Americans save for retirement?
15. 22% of workers have no idea how US retirement funds work or where the retirement money is invested.
(Investopedia)
If this is indeed the case with you, that means you could be working for less than your colleagues! How is this possible?
For instance, if your employer can match your contributions to 401(k), and you’re not taking that chance, you’re basically passing on money that is rightfully yours.
16. Fun facts about retirement and gender: only 68% of women save for retirement, compared to 81% of men.
(Transamerica)
Female workers have fewer retirement savings than their male counterparts. About 7 in 10 women have a sound retirement plan (401(k) or similar), or they invest in mutual or personal accounts.
Women also tend to start saving later in life, at age 27. Men, on the other hand, start the process when they are 26 years old, on average.
17. Based on the retirement stats from 2020, the personal savings rate in the US amounted to 13.7%.
(Statista)
This was also the highest rate compared to the previous years. If you look at the timeline, you’ll notice that the highest percentages of personal savings rates were seen in 1970 (13.2%) and 2012 (12%).
The saving rate can be described as the ratio of money saved by families or individuals to their expendable earnings. However, the total value will depend on many factors, like inflation, employment conditions, the state of the economy, and interest rates.
18. According to the retirement savings statistics, women have lower retirement savings than men.
(Annuity)
While the total retirement savings for women amount to $23,000, the men’s retirement savings amount to $76,000.
Only 16% of women managed to save over $250,000, compared to 30% of men.
What’s more, 31% of women managed to save only $10,000 (or less) for retirement, compared to 20% of men.
Additionally, retirement statistics imply 43% of women don’t have a particular retirement strategy. Up to 62% of their male colleagues named saving for retirement as their priority.
19. 54% of Americans put their trust into 401(k) plans when it comes to their retirement saving account.
(Statista)
American retirement savings statistics show 55% believe the good old regular savings account is the most reliable. However, that’s not the only retirement saving account there is.
19% of future retirees also use the certificate of deposit for the purpose. 20% are fans of traditional IRA, whereas 19% like Roth IRA.
20. 401(k) and 403(b) are the most popular retirement savings plans because they are tax-free until you decide to withdraw them, as noted by retirement statistics.
(CNN Money)
These two plans are preferred due to one more reason. You can opt for the traditional option and bear no taxes on the amount of money put into the account.
Likewise, you can pick the Roth option, which is vice versa — meaning the money you withdraw is tax-free. The downsides? The amount of money you can put into these two accounts is limited.
Baby Boomers Retirement Statistics
How are Baby Boomers, aka Boomers (people who are born between 1946 and 1964), approaching their retirement and savings plans?
21. An average 65–74-year-old spends about $55,000 on living expenses per annum.
(CNBC)
Baby Boomers do live in a fantasy world sometimes, as 60% of them believe they are perfectly capable of living comfortably with less than $55,000.
Likewise, based on the Baby Boomer retirement statistics, 44% think they’ll require less than $35,000, and 26% of Boomers feel they’ll be just fine with approximately $35,000–$55,000.
Only 16% are willing to admit their lifestyle requires between $55,000 to $75,000 per year in order to be fully satisfied.
Finally, 14% are quite positive about the fact that they need over $75,000 to enjoy retirement.
22. Baby Boomers retiring statistics report that 10,000 Boomers turn 65 each day.
(Forbes)
This trend is supposed to go on ‘till 2030 when the last group of Baby Boomers turns 65. That’s 70,000 per week or about 280,000 every month. This is the second-largest generation (millennials come first).
Unfortunately, the average Boomer is looking forward to living off of Social Security benefits.
23. 45% of Boomers don’t possess any retirement savings, which is an alarming retirement statistic.
(IRI)
60 years old and no retirement savings? Indeed, it’s true for some. That doesn’t mean the post-war generation has never saved for retirement.
One in five Boomers admits they have saved for retirement, but the funds disappeared at some point.
24. 45% of Boomers feel it’s acceptable to enter your retirement indebted.
(Yahoo Money)
Somewhat surprisingly, that’s a higher percentage and a more relaxed attitude compared to other generations! Only 37% of millennials agree with this opinion, while 40% of their parents (Gen X) think it’s OK to be retired and still pay off debts.
25. Baby Boomer retirement facts tell us 47% of boomers are already retired.
(IRI)
There were 34 million retired Boomers in total in 2019, and the figure keeps rising. Yet, that does not necessarily mean a Baby Boomer will retire when they turn the right age.
26% of Boomers are planning to retire when they’re 70, or perhaps avoid retirement entirely.
26. About 28 million Baby Boomers decided to retire in the third quarter of 2020.
(Pew Research)
Retirement statistics from 2020 suggest that 3.2 million more Boomers decided to retire in the mentioned year, compared to the 25.4 million who retired in the same period in 2019.
The number of retired Boomers witnessed an increase of approximately 1.1 million since February 2020. At the same time, between February and September, there was a much smaller number of retired Boomers — about 250,000. Coronavirus pandemic and unemployment could have contributed to the increase in rates.
27. According to the retirement savings statistics from 2019, only 11% of Boomers managed to save up to $500,000 for their retirement.
(MarketWatch)
Sadly, 23% of Boomers don’t have any retirement savings. In comparison, 17% had managed to save enough money for their retirement, but they also managed to spend it.
28. 58% of the retired demographics rely on downsizing or living on Social Security income if they run out of money.
(CNBC)
Retirement crisis facts state 37% would return to work for extra cash, and only 6% would turn to their children for help.
Moreover, those who postponed retirement and are 67–72 years old lived to regret it. One-third of them wish they had retired on time and saved more, too.
29. 70% of Baby Boomers have less than $300,000 in savings.
(Nasdaq)
We can say that more than half of Boomers are “poor,” due to their small collective net wealth of $5.5 trillion. Based on the retirement crisis statistics, 25% of Boomers with $300,000–$2 million in savings belong to the middle.
Only 5% of Boomers can be defined as “rich,” having over $2 million in savings. Their collective net worth amounts to $30 trillion.
30. Merely 20% of Boomers have fully recovered from the Great Recession consequences.
(Debt.com)
Knowing how the Great Recession destroyed a $16.4 trillion net household wealth between 2007 and 2009, people still feel its consequences.
Retirement statistics imply that, besides Boomers, 23% of Millennials and Gen Xers feel they still have a long way to go before (or if) they recover financially from the Great Recession.
FAQs
How did the pandemic affect the retirement crisis?
Generally speaking, the situation with the Retirement Crisis is almost the same as it was a year ago. Before the coronavirus crisis, by the age of 62, most people started claiming Social security. This trend will most likely stay intact.
How much should I have saved for retirement by age 60?
For the most part, it is said you ought to have saved between 7 and 9 times the desired income in savings by the time you’re 60. However, the answer depends mainly on how much you wish to spend during your retirement.
Certainly, holidays in Europe and staying in expensive Airbnb locations require above-average retirement savings.
That said, by the time you’re 65, you’ll need to have between 8 and 11 times the desired income in savings.
How much should I have in retirement at age 53?
On the one hand, by the time you reach 50 years of age, you should have 5 to 6 times desired income in savings. On the other hand, by age of 55, you’ll need to have saved 6 to 7 times your desired income in savings.
Again, there is no secret formula. The amount of your retirement will depend on your standard of living, location, and retirement income savings.
What is the most common age of retirement?
In the US, the average retirement age is 65 for men and 63 for women. The average retirement age varies across states, though. Utah, Massachusetts, Nebraska, New Jersey, Wyoming, Nevada, and Kansas citizens retire at 65. However, Missouri, Alabama, Kentucky, and South Karolina seniors retire when they turn 62.
How much does the average person have when they retire?
According to research from 2019, the average balance of 401(k) plans was $103,700. As for Roth and other IRAs, there was $107,100 on these accounts. Lastly, 403(b) and a private retirement plan contribute to just $85,800.
Nevertheless, the general opinion of different analysts and experts would be that most Americans do not have enough funds when they retire.
What is the average retirement income for 2019?
Based on the U.S. Census Bureau reports, in 2019, the average median income for people over 65 was $47,357, while the average mean income amounted to $73,288.
Keep in mind that there was a difference in households median and mean incomes, based on the age:
- Households aged 55–59 — median income: $73,711; mean income: $102,203
- Households aged 60–64 — median income:$64,846; mean income: $91,543.
- Households aged 65–69 — median income: $53,951; mean income: $79,661
- Households aged 70–74 — median income: $50,840; mean income: $73,028
- Households aged 75+ — median income: $34,925; mean income: $54,416
What is the average retirement savings in 2020?
Different age groups have different average retirement savings. In 2020, the average value of retirement savings was highest among individuals between 55–59 years ($223,493), people aged 60–64 ($221,451), 65–69 years old ($206,819), and 70–74 years old ($203, 964).
Individuals between 45–49 had an average value of retirement savings of $148,950, followed by 50–54 years old ($146,068), 75–79 years old ($143,613), and 80+ ($128,216).
Next, retirement statistics show 40–44 years old and 35–39 years old saved $101.899 and $48.710, respectively, while the youngest individuals had the lowest numbers. 30–34 years old saved $21.731, 25–29 years old saved $9,408, and 18–24 years old saved $4,745.
Conclusion
We believe we’ve painted a clear picture of average retirement savings statistics. As you can see, they’re not that great, despite the fact it’s 2021 and a lot of financial points are available to us.
If you haven’t already, do take the stats mentioned above as a wake-up call and work on bettering your status. Now that you know how much an average retired household spends, you should realize what percentage to save for retirement.
On the other hand, these stats could also have been an indicator that you’re on the right track.
If your figures surpass the above-mentioned retirement statistics regarding savings and income, feel free to share some advice with us in the comments down below!
Sources:
- Annuity
- CNBC
- CNN Money
- CNN Money
- Debt.com
- EBRI
- Forbes
- Forbes
- Investopedia
- Investopedia
- Investopedia
- IRI
- MarketWatch
- Nasdaq
- Nasdaq
- NewRetirement
- Personal Capital
- Pew Research
- Real Estate Career
- Seven Capital
- Statista
- Statista
- Statista
- Statista
- Statista
- Statista
- The Balance
- The Street
- Transamerica
- USA.gov
- Yahoo Money
