Retirement Crisis Deepens for 55+ Americans
Americans entering retirement face financial challenges with little or no savings at age 55+, with common pitfalls including underestimating expenses and over-relying on Social Security. Late starters need to explore options like part-time work or downsizing to stretch limited resources.
Roughly 4 in 10 Americans between the ages of 45 and 64 have no money in an IRA or employer-sponsored retirement account. For households in the 55 to 64 age bracket that do have retirement accounts, the median savings is $185,000. Inflation remains a top concern for retirees, with 78% worried about its impact on their savings. Rising costs for essentials like housing, healthcare, and food mean that fixed incomes buy less over time, potentially forcing retirees to withdraw more from their savings than planned. While Social Security does have cost-of-living adjustments, they may not fully keep pace with inflation. A growing number of retirees are working part-time to supplement their income and stay active. Projections show that by 2033, about 30% of Americans aged 65 to 74 are expected to still be in the labor force. Financial reasons are a primary driver for most workers who plan to continue working in some capacity after retirement. In response to the retirement savings challenge, Congress passed the SECURE Act in 2019 and SECURE 2.0 in 2022. These laws aim to improve retirement security by making it easier to save, increasing the age for required minimum distributions (RMDs) to 73, and allowing for larger catch-up contributions for those nearing retirement. While often seen as a way to unlock funds, downsizing can be complex. Although 29% of individuals over 45 consider downsizing, only 13% of those over 75 have actually done so. Many retirees feel a strong attachment to their homes and communities, and the costs associated with moving can sometimes offset the financial benefits.
