The Difficult Truth about Retirement in America

Every year a huge number of Americans retire. In fact, more and more Baby Boomers are exiting the workforce with plans to golf, travel, and spend more time with the grandkids.

There were 76 million people born between the years 1946 and 1964, the traditional window for the Baby Boom generation. That means they will retire over a 19-year period. Simple math shows that 76 divided by 19 is 4 million, or almost 11,000 people a day. 

While a certain percentage will die before they reach retirement age, analysts say that immigrants will actually boost the number of potential Baby-Boomer retirees to nearly 80 million —and not everyone retires exactly at 65 or 66. Some Baby Boomers likely retired at 62. So let’s say it is 80 million over 20 years—which still yields 4 million a year.

That’s a lot of people

Retirees and future retirees depend on or will depend on, income from Social Security to help provide a financially comfortable lifestyle. Concerns about financial security in retirement are not unfounded. Many Americans are woefully unprepared for retirement, with too little savings, unrealistic ideas about when retirement will occur, and no clear plan for paying for healthcare in retirement. In fact, these statistics about retirement show that Americans are in trouble when it comes to their post-working years.

According to the Employee Benefit Research Institute, only 17 percent of workers are very confident in their ability to live comfortably in retirement. That’s not surprising considering a 2018 retirement savings survey which found that 42 percent of Americans have less than $10,000 saved. If they don’t boost their savings, they’ll likely retire broke because that’s not enough to cover a year’s worth of expenses. On average, adults 65 and older spend almost $46,000 a year, according to the Bureau of Labor Statistics. 

In order to supplement income after retirement, about a quarter of current retirees say some of their income comes from working for pay during retirement. It's a problem that the number is this low because two-thirds of current workers expect work for pay will be a major or minor source of retirement income. Unfortunately, you can't count on your ability to continue to bring in a paycheck after you hit retirement age. Many people either are too sick to work, or struggle to find work and have no choice but to live off their Social Security benefits and their savings. 

It’s worth asking the question: “Why aren’t Americans saving for their retirement? Well, according to GoBankingRates, the answer is simple. The top answer to that question is that people feel they aren’t making enough money to save. 

The obvious counter-argument then is to make more money. But that’s easier said than done. In lieu of earning more, perhaps the answer is living a smarter financial life and managing what money you do earn in a more effective way.

 

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