110 Retirement Statistics: Demographics, Planning, and Saving

It's essential to understand and prepare for the evolving retirement situation. Given the changing demographics, ever-shifting financial circumstances, and emerging patterns, staying well-informed about the most recent retirement developments can enable individuals to make knowledgeable choices to ensure a satisfying retirement.

In this context, we will explore the critical retirement figures for 2023. Whether you are just starting your retirement planning journey or are approaching the retirement phase, these pieces of information can provide valuable insights into the present retirement scenario. Additionally, we've included some helpful advice on managing your retirement finances to provide you with guidance.

Retirement Planning and Saving Statistics

The typical retirement fund for Americans stands at $87,000, even though many believe they require millions to retire comfortably.¹⁶ This situation may arise due to insufficient savings on the part of Americans or the possibility that their employment does not provide robust retirement options.

Considering this, here are some essential insights about retirement planning and saving that you should know.

• 28% of the United States's non-retired population lacks any retirement savings.¹
• Even though they possess an IRA or 401(k), 60% of individuals without retirement savings feel anxious about handling their finances.¹
• 75% of employees contribute to their retirement savings through their employer-sponsored retirement program or independently outside their work.²
• Part-time workers, at 60% , are less likely to save for retirement through their employer's retirement plans or independently outside of work, compared to full-time workers, who stand at 79%.²
• Typically, individuals start saving for retirement around the age of 27.²
• On average, retirement lasts for approximately 18 years. Assuming a retirement age of 66, an average retiree would experience retirement until age 84; however, it's important to note that this average doesn't apply universally to everyone, as individual life expectancies after retirement vary.²
• Roughly 56%  of Americans lack knowledge about the money they will require for retirement.²
• Among individuals aged 55 to 64, the median retirement savings amount to slightly above $107,000.³
• To retire early, a minimum of $5 million is deemed necessary by some individuals.³
• Just 12% of women express "high certainty" that they will achieve a retirement with a comfortable standard of living.⁴

• A small proportion of women, only 14%, engage in frequent discussions about saving, investing, and retirement planning with their family and close friends.⁴
• Only 29% of women know the Saver's Credit, a tax credit designed to incentivize retirement savings.⁴
• Men possess more outstanding account balances, with an average of $170,942, compared to women, who have an average of $118,849 in their accounts.⁴
• A substantial 82% of employees who are provided with an employer-sponsored retirement savings plan report being somewhat or very content with this benefit.⁴
• On average, Americans believe they require $1.9 million in savings for their retirement.⁴
• According to a recent survey, 27% of savers have halted or decreased their retirement savings, and 9% have withdrawn funds from their retirement accounts.⁴
• A mere 15% of women have a formal, written retirement strategy, while 42% have an informal, unwritten approach to retirement planning.⁴
• Approximately 37% of women enlist the services of a professional financial advisor to assist them in managing their retirement savings and investments.⁴
• Among individuals who have been married once, around 35% have no retirement savings. In comparison, roughly 60% of individuals who have never married and 40% who have been married multiple times lack retirement savings.⁴

The Cost To Retire Well as of 2023

• Women with children with a single partner are somewhat more inclined to have no retirement savings than women with no children (38.2% vs. 34.2%). However, among those with retirement savings, women with no children do not exhibit any significant differences from those with children with a single partner.⁵
• Among adults who have never married, those with children with a single partner are significantly more likely to have no retirement savings than those without children (72.7% vs. 52.7%).⁵
• A higher percentage of never-married adults with children with multiple partners have no retirement savings than never-married parents with a single partner (81.7% vs. 72.7%).⁵
• A majority of Americans, precisely 58%, rated the adequacy of their retirement savings as a C or lower, indicating concerns about their retirement preparedness.⁵
• Approximately 50% of Americans with retirement accounts have made early withdrawals from these accounts, which can have implications for their long-term retirement savings goals.⁵
• Only 13.5% of working-age individuals have access to a defined-benefit or cash balance retirement plan, which provides a guaranteed income in retirement based on a predetermined formula.⁵

The data presented highlights significant challenges and disparities in retirement savings and planning among various demographic groups in the United States. These statistics underscore the need for increased financial education and awareness, particularly regarding retirement savings options and tax incentives like the Saver's Credit.

Additionally, the prevalence of early withdrawals and the relatively low percentage of individuals with access to defined-benefit or cash balance plans reflect the ongoing struggle many Americans face in adequately preparing for retirement. As we move into the next section of life within retirement, we see what exactly it consists of.

Life in Retirement Statistics

The expected expenses during your retirement years can differ based on factors such as your location, health, and lifestyle, but here is a general estimate of what you can anticipate spending. From spending to living expenses, the following stats will focus on the average life in retirement and what it entails.

• 29% of Americans anticipate improving their quality of life during retirement.⁶
• Women have aspirations of an active retirement, which includes activities like traveling (67%), increasing time spent with family and friends (59%), pursuing hobbies (44%), engaging in volunteer work (28%), and even continuing to work (26%).⁶
• Most women, comprising 54%, plan to work during their retirement years, with some opting for full-time employment (12%) and others choosing part-time work (42%).⁶
• The average retirement age for respondents was found to be 62. According to data from the Centers for Disease Control and Prevention, the current life expectancy is nearly 79 years.⁶
• As of January 2022, a 65-year-old woman has a 50% probability of reaching the age of 86.5, while a 65-year-old man has a 50% chance of living to the age of 84.⁶
• A well-diversified retirement portfolio comprising 40% large-cap US stocks, 25% small-cap US stocks, 25% US bonds, and 10% cash has demonstrated a 98% success rate at least 35 years into retirement without depleting its funds.⁶
• Non-retirees who have a disability are generally less likely to possess retirement savings and to consider their savings as being adequate for their future needs. Specifically, only 47% of non-retirees with a disability reported having any retirement savings, and a mere 13% believed their savings were sufficient or on track for their retirement goals.¹

Spending

• The mean annual expenditure for individuals aged 65 and older in the United States amounted to $47,579.⁷
• Households in the United States under 55 typically spend nearly $58,000 annually on various expenses.⁷
• However, at 55, retirees tend to increase their spending, often due to increased travel and new activities.⁷
• Spending patterns generally decline significantly in the age group of 65 and older, where most individuals are retired.⁷
• Workers allocated $23,245 toward housing costs, while retirees spent $17,435.⁷
• Retirees incurred an average of $6,668 in healthcare expenses, whereas workers' healthcare spending averaged $4,762.⁷
• An average retired couple is projected to allocate $300,000 for healthcare expenses, encompassing Medicare premiums, copays, deductibles, and non-covered prescription medications.⁷
• The average cost of a Medicare Advantage plan is only $21 per month, representing a 34% reduction in expenses.⁷
• According to research by the Senior Citizens League, cost-of-living adjustments (COLAs) have risen by 55% over the past two decades, while older adults' expenses have surged by 104.8%.⁷

Housing and Living

• Only 4.5% of individuals over 65 currently reside in nursing homes, indicating that most prefer alternative living arrangements.⁸
• Nearly 19% of Americans aged 65 and older have moved to another state or country, suggesting a significant level of mobility among this demographic.⁸
• A substantial 77% of retirees desire to remain in their local community for as long as possible, highlighting the importance of community-based support and services for older individuals.⁸
• Renters spend a significant portion of their income, precisely 76%, on housing costs, notably higher than the 36% homeowners spend.⁸
• Frequent social activities appear to be associated with a 70% reduction in cognitive decline as individuals age compared to those with little social interaction. This underscores the potential benefits of staying socially active in later life for cognitive health.⁸

Work

• Two-thirds of retirees say their most recent employer failed to help them adjust to retirement.⁹
• About 28% of retired people report feeling pressured to retire.⁹
• More than half of workers (55%) plan to continue working in retirement.⁹
• A lack of retirement savings accounts for 35% of those who plan to work in retirement.⁹
• Health concerns are the reason why 72% of retirees continue to work in retirement.⁹
• These reasons include remaining physically active (47%), keeping the brain alert (39%), keeping a sense of purpose (34%), and maintaining social connections (21%).⁹
• As for their primary source of income, 14% of retirees plan to work after retirement.⁹

As people live longer, with varied life expectancies, it's increasingly important to plan for a financially secure retirement and consider how work, health, and social engagement play vital roles in this phase of life.

The search for a fulfilling and comfortable retirement highlights the need for ongoing financial literacy, employer support, and strategies that address financial security and overall well-being in retirement.

As we transition into our next section, we will focus on retirement in various countries and what it means for those saving up to retire.

Retirement Demographic Statistics

Retirement, a phase often envisioned as the golden years of relaxation and leisure, holds varying connotations across demographics and cultures. As populations age and financial landscapes evolve, understanding the nuances of retirement planning becomes paramount.

This section looks into the diverse aspirations, preparations, and expectations associated with retirement, providing insights vital for anyone looking to navigate this significant life milestone effectively.

Retirement Age

• The current average retirement age for retirees in the US is 62, whereas the anticipated retirement age for current workers is 66 years old.¹⁰
• The full retirement age ( the age at which a person is expected or required to cease work in which they receive their pension/social security benefits) is 67 for individuals born in 1960 or later.¹⁰
• The retirement age is the lowest in Alaska and West Virginia, where people retire at an average age of 61.¹⁰
• Conversely, in South Dakota, Massachusetts, and Hawaii, retirement age is highest, with people retiring at an average age of 66.¹⁰
• The full retirement age is 66 for individuals born between 1943 and 1954.¹⁰
• By 2030, one out of every six people worldwide will have reached the age of 60 or older.¹⁰
• Around 80% of senior citizens are expected to reside in low- and middle-income regions by the year 2050.¹⁰
• The global proportion of individuals over the age of 60 is projected to rise from 12% in 2015 to 22% by 2050.¹⁰
• Among those who have lost their jobs due to chronic illness, older women (aged 60+) account for 56% of such cases.¹⁰
• Women aged 60 and older face the dual challenge of having the lowest household incomes and the highest out-of-pocket medical costs.¹⁰
• Individuals of color aged 60 and older experience average annual treatment expenses that are 15% higher than those of white seniors, primarily due to a higher prevalence of more expensive chronic health conditions.¹⁰
• Maine has the highest state population percentage of individuals aged 65 and older, at 21.8%.¹⁰
• In 2060, the United States is projected to have approximately 94.7 million individuals aged 65 or older.¹⁰

Women and Retirement

• The average 401(k) balance for women stands at just $59,000, while men have an average 401(k) balance of $89,000.¹¹
• A higher percentage of men (10%) contribute the maximum amount to their 401(k) compared to women (7%).¹¹
• In 2022, women saved approximately $3,146, whereas men saved around $7,007.¹¹
• Only 17% of women reported feeling confident about meeting their financial goals, unlike 26% of men who felt the same way.¹¹
• A more significant proportion of women, precisely 42%, anticipate having less than $3,000 per month in retirement income, whereas this figure is 27% for men.¹¹
• Women (50%) are more likely than men (47%) to lack retirement savings.¹¹
• Furthermore, women have lower amounts saved in their retirement funds, with only 22% saving $100,000 or more, while 30% of men surpass the $100,000 mark in their retirement savings.¹¹

Retirement and Race

• Regarding retirement accounts, 44% of Black families have some form of retirement account, while this figure is 28% for Hispanic families and notably higher at 65% for White families.¹¹
• White families are also more inclined to have access to employer-sponsored retirement plans compared to Black or Hispanic families.¹¹
• Regarding savings within retirement accounts, Black and Hispanic families typically save around $20,000, whereas White families save approximately $50,000.¹¹
• It's worth noting that older adults from racial and ethnic minority groups who live alone are at a higher risk of experiencing economic insecurity.¹¹
• Specifically, 72% of older Hispanic singles face economic insecurity, followed by 64% of older Black singles, 59% of older Asian singles, and 47% of older White singles.¹¹
• Additionally, homeownership rates vary, with 44% of Black families and 50% of Hispanic families owning their primary residence, in contrast to 72% of White families who own their homes.¹¹

The shift in the age distribution toward older populations is a global phenomenon, and countries need to prepare for an aging society's social and economic implications. It's crucial to address disparities in retirement savings and access to retirement plans, as well as the unique challenges faced by older women, individuals of color, and those with chronic illnesses.

Social Security Statistics

Numerous retired individuals intend to depend on social security payments to sustain them throughout their retirement years. Some will rely on alternative savings or investments; however, we focus on what and how social security payments will sustain individuals during their retirement years.

• Social Security remains a crucial retirement benefit in the US, but its sustainability has been debated. Projections have indicated that without changes to the system, the Social Security Trust Fund could be depleted by the 2030s.¹²
• Roughly 20% of the US population, amounting to 66 million individuals, were beneficiaries of Social Security payments in February 2023.¹²
• Females accounted for approximately 55% of the adult individuals who received Social Security benefits.¹³
• In 2022, 90% of individuals aged 65 and older received Social Security benefits.¹³
• Social Security constituted approximately 30% of the income for older adults.¹³
• Among Social Security beneficiaries, 37% of men and 42% of women relied on it for over 50% of their income.¹³
• Retired workers comprised 76.9% of the total Social Security benefits paid in 2022.¹³
• The average monthly Social Security benefit for retired workers in 2022 amounted to $1,825.¹³
• Approximately 40% of senior citizens depend on Social Security funds to support retirement.¹³
• In 2023, an estimated 67 million Americans will receive monthly Social Security benefits, with over $1 trillion distributed annually.¹⁴
• As of December 31, 2022, nearly 90% of individuals aged 65 and older received Social Security benefits.¹⁴
• Retired workers and their dependents collectively received 76.9% of all Social Security benefits distributed in 2022.¹⁴

• As of 2023, Social Security stands as the most common source of retirement income.¹⁴
• For January 2023, the expected average monthly Social Security retirement payout is $1,827.¹⁴
• The number of retired workers receiving Social Security benefits has grown from around 34.59 million in 2010 to 48.59 million in 2022.¹⁴
• Nearly two-thirds of retirees who are beneficiaries receive 50% or more of their total income from their monthly Social Security payments.¹⁴
• A survey indicates that 24% of respondents in the United States express extreme concern regarding potential cuts to Social Security.¹⁴

When People Claim Social Security Benefits

• Among elderly Social Security beneficiaries, 12% of men and 15% of women depend on Social Security for 90% or more of their income.¹⁵
• According to the data, 57% of retired adults in the United States report relying on Social Security as a significant income source, whereas 38% of non-retired individuals anticipate doing the same in the future.¹⁵
• Women constitute 55% of adult recipients of Supplemental Security Income (SSI).¹⁵
• In 2033, it is projected that Social Security benefits will face a 23% reduction.¹¹
• 69.1 million people received benefits from programs administered by the Social Security Administration (SSA).¹⁰
• 5.7 million people were newly awarded Social Security benefits.¹³

Social Security plays a vital role in the financial well-being of millions of Americans, particularly the elderly and disabled. It provides a significant portion of income for retirees and those in need, with many beneficiaries relying heavily on these benefits.

Frequently Asked Questions

Wrapping Up

The statistics presented here depict an intriguing retirement scenario: everyone seems to be pursuing a different approach. Therefore, considering the potential confusion surrounding financial planning, we advise seeking guidance from an impartial and experienced financial professional for additional insight.

Retirement planning involves numerous complex elements. An expert in this field can comprehend how they will fit into your specific circumstances, assisting you in formulating the most suitable strategy to achieve your objectives.

Sources

1. Federal Reserve
2. Transamerica Center
3. GAO
4. SSA
5. AARP
6. SSA
7. NCOA Chronic Disease Inequities
8. WHO
9. BLS
10. Medicare
11. EBRI
12. Statista
13. Statista
14. Bankrate
15. AAG

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