If baby boomers didn’t already have a head of grays, considering the prospect of retirement is likely enough to transform them into a regular Anderson Cooper. It’s no secret that leaving the workforce is no walk in the park, though the process has recently become more like an Ironman Triathlon as employees struggle to compete with the cost of living.
Just ask the current class of retirees for confirmation of the broken system, as 66% of them claim that the nation has entered a “retirement crisis,” per real estate company Clever’s recent survey of 1,000 U.S. Retirees. The goalposts seemingly keep moving forward, as the current prospect of retirement requires a larger nest egg than in the past. Now, the price tag on a comfortable retirement carries a cost of more than $1 million. Of course, that’s not in the cards for many Americans, given that the median retiree has just $142,500 in savings, while 25% haven’t saved anything at all.
Beyond boomers, it only gets worse. Many people have nothing saved. As of 2022, almost half of Americans didn’t have anything in their retirement accounts, per the Survey of Consumer Finances (SCF). Accumulating even personal emergency savings is an uphill battle, as a majority of Americans report that their wages can’t compete with the cost of living. Of course, Social Security is also suffering as it’s predicted to become a deficit program without any updates.
Though inflation has ebbed, households are still struggling to stay afloat even when it comes to weekly necessities like groceries. And many are burdened with debt, whether it be from student loans or credit cards. Saving for eventually leaving the workforce while paying regular bills marred by inflation and digging out of the negatives becomes an even more trying feat. Adding insult to injury, classic avenues for building wealth such as buying a house are now trickier to navigate and afford. Not only is the journey all the more difficult, the final destination has become more expensive as people live longer in an increasingly expensive world.
It stands to reason then that any money set aside for retirement has to last longer. While 40% of retirees worry that they’ll live longer than their savings, a good 19% of respondents already have outlived them, per Clever. Slightly more than a third (34%) of these former employees note that they’re burning through their funds faster than anticipated, some reporting that they’re considering returning to the workforce to make ends meet. The average retiree owes $15,393 in non-mortgage debt. Living longer and paying more, many boomers aren’t able to foot the bill for their own funeral services, as 23% of retirees tell Clever they don’t think they’ll be able to afford their final resting place.
Following generations aren’t likely to have it any easier. Gen Xers are already taking note of the difficult path ahead. “I’ve followed my dreams, as my generation was told to do, but found that some dreams cost more to follow than others,” a Gen Xer wrote to Coins2Day’s Alicia Adamczyk. “My savings are virtually nonexistent.”
Given that pensions are often reserved for those in public-sector roles, employees are forced to turn to their company 401(k)s. Back in 1989 about half of households with working adults ages 50 to 60 had a pension plan, a number that dropped down to just a quarter in 2022, reports USAFacts. As for those eyeing retirement, many blame their employer in part for their current situation. Some 55% tell Clever that their company didn’t help them enough in saving for their golden years. Even more (80%) claim that the government should assist more in the retirement crisis. Retired women are in even more dire straits as they are 33% more likely than men to say they haven’t budgeted enough for an easy retirement. Often shouldering more of the childcare cost and responsibilities, women are left with less socked away for their own goals—28% of retired women have nothing saved for their retirement compared with 20% of men.
Many retirees have regrets about how they budgeted for their career exodus, with 56% surveyed reporting that they didn’t know how much they needed to save. Still, most retirees (68%) claim that the economy is what really impacted their retirement goals. Whether it’s the lack of government or corporate assistance, it seems as if wasting away in Margaritaville is really a luxury for millionaires these days as the cradle is revealed to be broken for our baby boomers.
