ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / ECONOMY & WORK

28% of Americans Stare Down Retirement with Nothing Saved

Americans aged 18 to 65 and beyond find themselves unprepared for retirement.
PUBLISHED MAR 18, 2024
Cover Image Source: Retirement Savings | Unsplash | Photo by Towfiqu barbhuiya
Cover Image Source: Retirement Savings | Unsplash | Photo by Towfiqu barbhuiya

As the cost of living continues to rise, retirement savings for many Americans are virtually nonexistent, painting a grim picture of their golden years. According to a recent survey by GoBankingRates, 28% of Americans have absolutely nothing saved for retirement. This alarming statistic is coupled with the revelation that 39% are not contributing to any retirement fund, while another 30% harbor doubts about ever being able to retire comfortably.

Image Source: Pexels|Photo by T Leish
Image Source: Pexels | Photo by T Leish

Not being able to save for retirement is a multifaceted issue affecting a large number of the population. Americans aged 18 to 65 and beyond find themselves unprepared for retirement.

Data from the Survey of Consumer Finances highlights that nearly half of American households lack any form of retirement savings. This encompasses various accounts such as individual retirement accounts (IRAs), employer-sponsored accounts like 401(k)s, 403(b)s, and pensions, among others.

Moreover, the decline in traditional pension plans further exacerbates the retirement savings crisis. While half of working households aged 50 to 60 had defined benefit plans in 1989, this number dwindled to a mere quarter by 2022. As a result, individuals are becoming increasingly reliant on personal savings to fund their retirement.

Image Source: Nora Carol Photography/Getty Images
Image Source: Photo by Nora Carol Photography | Getty Images

Despite the importance of personal saving, the reality is sobering. Only a fraction of households have amassed substantial retirement nest eggs. In 2022, only 26% reported savings exceeding $100,000, with 9% boasting balances exceeding $500,000.

The disparity is particularly stark among age groups, with those aged 50 to 54 exhibiting higher savings rates compared to their younger counterparts.

"While alarming, the statistic does not surprise me. This highlights a widespread financial literacy gap and underscores many challenges in balancing immediate financial needs with long-term savings goals," stated Financial expert Edward Piazza, president of Titan Funding.

Pexels | Anna Shvets
Image Source: Pexels | Photo by Anna Shvets

The reliance on Social Security benefits underscores the precarious financial position of many retirees. With eligibility for full retirement benefits set at 67 for those under 63, a substantial portion of retirees will have to stretch meager savings to bridge the gap.

The median household between the ages of 30 and 34 possesses paltry retirement savings of $4,700, a significant difference compared to the $20,100 in overall financial assets. Similarly, households aged 55 to 59 fare marginally better, with median retirement savings of $24,500 but face a bleak net worth of $30,700.

Moreover, the savings landscape is further complicated by disparities in asset distribution. While most households maintain modest balances in checking and savings accounts, some lack substantial financial assets. Furthermore, only 12% of households possess more than $100,000 across both account types.

Image Source: Kinga/Getty Images
Image Source: Photo by Kinga | Getty Images

"The statistic that 30% of Americans have $0 saved for retirement is alarming but not surprising," said retirement planning expert Mike Kojonen, founder and owner of Principal Preservation Services. "Through countless consultations, I’ve observed a prevalent lack of awareness about the cost of retirement and a significant underestimation of how much needs to be saved."

While some households boast net worth exceeding $100,000, a sizable segment remains precariously positioned for retirement. The absence of adequate savings amplifies the importance of financial literacy and planning initiatives to empower individuals to navigate their retirement journey effectively.

MORE ON MARKET REALIST
Barbara Corcoran made the exact same offer, and she wasn't happy about being rejected.
3 hours ago
The guest believed that it was worth a modest amount of money, but that was clearly not the case.
4 hours ago
With James Holzhauer in the lead, Amy Schneider and Andrew He decided to joke around.
5 hours ago
Barbara Corcoran told the founders that she had never seen Greiner so passionate.
7 hours ago
The guest said that it was left to her by her grandmother who passed at the age of 102.
1 day ago
The host was quick to latch on to his way of speaking and made a mockery of it on TV.
1 day ago
The contestant was clearly just happy to win the chance of being on the same stage as Drew Carey.
1 day ago
The player, Thomas Russo, nearly put all of his strength into spinning the wheel.
1 day ago
Things took a turn for the better with the shark as far as the entrepreneurs were concerned.
2 days ago
The expert pointed out the intricate details on the item and said it was a personal item of the royals.
2 days ago
The expert said that if the signature was on a letterhead when Garfield was President, it would be worth more.
2 days ago
Had the contestants not gotten their gamble right, they would have lost everything they'd earned.
3 days ago
The revelation came thanks to a fan who asked the question during a "Jeopardy!" taping.
3 days ago
The entrepreneurs' decision came as a big shock to the sharks, and they did not hide it.
3 days ago
Tina double-guessed her third answer, "Does April have 31 days?" Harvey gave her the stink eye.
3 days ago
All the theatrics didn't work when sharks started scrutinizing profit margins.
3 days ago
"Can I stop at any time?" the player nervously inquired. "You can stop any time you want, yes," Carey assured.
3 days ago
Guests on the show would run with it if they ever got that kind of money on Pawn Stars.
4 days ago
The guest even said to keep the kids in the dark about how valuable these items were.
4 days ago
The company had fantastic sales but a crushing debt with a high interest rate that the sharks hated.
4 days ago