66% of Retirees Feel US Is In Retirement Crisis: Report

American retirees are on the verge of returning to work with most struggling to make ends meet. According to a recent report from Clever, about two in three or 66% of retirees feel the US is in a retirement crisis. About 40% think they will outlive their retirement savings while 19% think they already have. While women retirees are at more risk of facing a difficult retirement, estimates from other reports paint a positive picture for the Gen Z.

Despite inflation slowing down and strong economic recovery, the increase in cost-of-living has put a lot of pressure on retirees, as about 80% of the respondents feel the government should do more to help them.

To retire comfortably, experts estimate Americans need to save anywhere between, $66000 to $1 million depending on where they live and how they plan on spending their retirement. However, according to Clever’s study, the average savings of retirees stood at $142,500.

Grim Outlook For Women Retirees

In the survey, while respondents expressed that they are seriously concerned about outliving their retirement savings, certain retirees are at more risk. The report indicated that retired women are 33% more likely to struggle financially during retirement as compared to men. Further, in the case of future retirees, about 28% of women said they have saved nothing for retirement compared to 20% of men.

Here’s How Retirement Planning Looks for GenZ

According to a survey from Vanguard, workers in the age group of 18 to 24 in 2021 were 32% more likely to invest in their workplace retirement plan than their older colleagues. The report analyzed generational changes in 401(k) behaviors. The report also mentioned that the younger generations have a lower participation rate in the program than the older generations.

Despite this, Gen Z’s participation rate in 2021 was more than twice as high as the previous generation who were in a similar age range in 2006. The report found about 62% of 18- to 24-year-olds were contributing in 2021, compared with 30% in 2006.

Behind this increased contribution, Vanguard stated that automatic enrolment in a 401(k) plan was a major reason. The report mentioned that in 2006, only about 11% of employers offered automatic enrolment but by the end of 2021, half of the plans did, which led to an increase in the 401(k)-participation rate.

Overall Lack of Retirement Planning

According to Clever’s report, retired men and women feel that they do not take saving more seriously. The study found about 1 in 4 people felt ashamed of their lack of retirement planning, while over half, 57% of retirees have regrets about their retirement.

About 56% of respondents said that they did not know how much they needed to save for retirement and about 54% have regrets about how they managed their money before retirement.

Furthermore, about 49% of the respondents said they waited too long to start saving and 47% said they did not prepare adequately for retirement.

Ray of Hope For Future Retirees

While the situation of current retirees may not look good, the outlook for future retirees is expected to get better. Rep. Richard Neal from Massachusetts introduced a recent bill that would require employers with more than 10 employees to automatically enroll their workers in retirement accounts.

Currently, most employers have the option to offer automatic retirement enrollment, but it is not mandated. Thus, if the bill is passed, most companies will be required to automatically offer enrolment and the option will be to opt-out. The legislation is expected to go into effect in 2026, as per a Fox Business report.