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Carrying credit card debt into retirement is a pretty terrible idea, yet 40% of baby boomers are struggling with it. That’s just one insightful and frightening statistic from this aggregation of statistics.
Not all of the numbers are scary, though. Fritz Gilbert tells us that 80% of retirees find that their lifestyles are as good or better than expected. Most are spending a sum smaller than equal to what they expected.
Having seen some preliminary results from my ongoing reader survey (fill one out for a chance to win $100 at Amazon & a virtual happy hour with me!), I can assure you that Physician on FIRE readers are much, much, much better prepared for retirement than the average American and probably significantly better than the average physician. I’m proud of you guys and gals.
This Friday Feature was originally published on The Retirement Manifesto and is syndicated below with permission.
Call me a nerd, but I love studying retirement statistics (for the record, I prefer to consider myself curious). When something as dramatic as COVID comes along, it really makes the numbers interesting.
If you’re curious like me, you’ll enjoy today’s post. A compilation of some fascinating retirement statistics I recently came across, including some graphs for those of you who prefer to view the charts.
If you’re interested in how you compare to “average”, you’ll also find today’s post of interest. Wondering what impact COVID has had on retirement confidence? We’ve got that covered, as well.
Curiosity-seekers, unite. This one is for you…
Fascinating Retirement Statistics
A while back, as I was doing some research for my post titled The Mad Retirement Rush of 2020, I came across an article with some interesting retirement statistics and saved the link into a draft post (I do that a lot, with over 100 draft posts currently holding ideas for future posts). I wanted to do further research on retirement statistics to see how many I could compile for a dedicated post on the topic.
Today, I’m pleased to publish the resulting work and share what I’ve found during my research. A variety of fascinating retirement statistics, dedicated to all of the fellow retirement nerds in the house.
With that, let’s dig into some numbers.
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Retirement Readiness Statistics
- Nearly 2/3 of 40-year-olds have <$100k saved for retirement (Source: TDAmeritrade Retirement Survey)
- 51% of Baby Boomers are still paying on their mortgage in retirement, and 40% struggle to pay off their credit card debt. (Source: Legaljobs.com)
- 1 out of 12 Americans believes they’ll never retire at all. (Source: Legaljobs.com)
- 50% of retirees retired earlier than they would have liked. (Source: TDAmeritrade Retirement Survey)
- 73% of retirees say their retirement was a “full-time stop”, with only 19% experiencing a gradual transition (e.g., fewer hours). Among those still working, half expect a gradual transition. Related, only 30% of retirees work for money in retirement, whereas 72% of workers expect to work for some pay in retirement. (Source: 2021 EBRI Retirement Confidence Survey)
- The average US household had $255,000 in their retirement accounts in 2019, a 5% increase from 2016 (Source: MagnifyMoney)
- Among those with 401(k), the average balance by age is shown below: (source, Empower as cited in MagnifyMoney)
COVID’s Impact on Retirement Confidence
- While the majority of workers are still confident of their ability to retire, 34% of workers are less confident in their ability to live comfortably in retirement than they were pre-COVID.
- COVID has caused 1 in 4 workers to adjust their expected retirement date, with 17% now planning to retire later and 6% who plan to retire earlier.
- 32% of workers say COVID has negatively impacted their ability to save for retirement.
All statistics in the above section compliments of 2021 EBRI Retirement Confidence Survey
- 30% of Americans with retirement accounts reported making withdrawals from them in the first two months of the COVID pandemic. The average withdrawal was $6,757 (Source: Investment News)
Baby Boomer Statistics
- Every day, 10,000 Baby Boomers turn 65 years old. (Source: Legaljobs.com)
- 8 in 10 retirees report that their overall lifestyle is as expected or better. Only 26% of retirees report retirement spending is higher than expected. (Source: 2021 EBRI Retirement Confidence Survey)
- Baby Boomer retirements increased significantly in 2020 vs. prior years. By September 2020, 40% of Baby Boomers were retired. (Source: Pew Research)
- At least 1.7 million older workers retired early due to COVID (Source: Bloomberg)
- Average annual spending by retirees in 2018 was $49,441, compared to $65,834 spent by workers. (Source: Annuity.org)
Social Security Statistics
- Between 2009 and 2019, the beneficiaries of Social Security have increased from 33.5 million to 45.1 million.
- An individual retiring at full retirement age in 2020 receives a maximum of $3,011 Social Security benefits. (All 3 of the above bullets per Legaljobs.com).
- 92% of retirees cite Social Security as their most common source of retirement income, with a surprising 58% citing pensions (Source: 2021 EBRI Retirement Confidence Survey):
- 72% of retirees and 53% of workers have confidence that Social Security will continue “to provide benefits of at least equal value to those received today”. (Source: 2021 EBRI Retirement Confidence Survey)
Pension Statistics
- 23% of boomers are subscribed to a private pension plan. (Source: Legaljobs.com)
- 79% of Union workers receive a pension, compared to just 17% of non-union workers. (Source: Legaljobs.com)
- In 2019, only 21% of workers have a pension plan, and 43% have a retirement savings plan (Source: Annuity.org)
Health Care & Life Expectancy
- Health care costs continue to be a top concern for retirees, with 1 in 3 saying their health and dental costs were higher than expected. (Source: 2021 EBRI Retirement Confidence Survey)
- The average retired couple leaving the workforce in 2020 will need an estimated $295,000, post-taxes, to pay for health care expenses (excluding long-term care). Source: MagnifyMoney
- A man turning 65 in 2020 has an average life expectancy of age 84, while 87 for a woman. (Source: Legaljobs.com)
Average Retirement Age Around The World
- The United Arab Emirates has the lowest average retirement age in the world at 49, which is both the official retirement age and the average actual retirement age for both men and women.
- Norway has the highest average retirement age in the world at 67 for both men and women.
Source: Annuity.org
Other Interesting Stats
- Gray Divorce is a real thing, with 1 of 4 spouses over the age of 50 divorcing (up from 1 in 10 just two decades ago). (Source: Legaljobs.com)
Conclusion
After 6+ years of writing, today marks my first “statistical compilation” post, filled with a variety of retirement statistics. I find it interesting to read various studies and comparing our situation to “normal”. I hope you feel the same, and enjoyed this compilation.
Your Turn: Are you a curious nerd? What retirement statistic most surprised you? Let’s chat in the comments…
6 thoughts on “Some Fascinating Retirement Statistics”
Thanks for the stats! While I’m not a ‘keep up w/the Joneses’ kind of husband, I have often used the stats to help my confidence that I’m staying well above some of the savings & retirement balances noted…. while realizing as stats, they can be skewed by ‘richer’ folks.
I used some of the stats to chat w/my spouse sitting here Sunday after church & bagels. She lets me do the finance/investing, and the ‘details’ make her nervous… but quoting some of your numbers here, leads her to ask ‘are our numbers better?’ and i can answer, yes, much, or 4x that rate, and we have my USG pension & not taking SS till 70 when it will be 30% higher, since my life expectancy should be at least mid 80s-90 yrs old.
Keep up the good work, it is appreciated!
These stats are super surprising to me mainly due to the combination of these 2 things:
1. 8/10 are happier retired and/or have a better quality of life.
2. Most don’t have much saved up (at retirement age).
I wonder what the conclusion or takeaway here is. Is it moreso at the time of the survey, they haven’t run into any issues with money yet and/or haven’t thought about it? Or do we not actually need as much as we think to have a better quality of life?
I’m thinking the former because the math seems to suggest that people just are saving hardly anything.
These are really interesting statistics – thanks for compiling them for us. The “elephant in the room”, is whether or not retirement is a worthy financial goal in the first place. As seductive as it sounds, the statistics on that front are not encouraging: worse mental health, physical health and life satisfaction.
As someone who achieved FI and quit medicine in my early 40’s, I’ve thought a lot about the difference between FI and retirement. My conclusion is that humans, especially doctors who tend to be very driven, are not content unless we’re working at something – the trick is to be able to choose those things. Now I work at things I love, like financial education for doctors, and I hope I’m never forced to retire.
If your readers are interested why retirement might not be the best financial goal, they can click on my link for a post I wrote about it, or use this one:
https://dividendstrategy.ca/stop-saving-for-retirement-start-saving-for-financial-independence/
Thanks again for the interesting post, Leif.
I think you made an error in quoting one statistic. You wrote:
The average US household had $255,000 in their retirement accounts in 2019
But the source you cite says:
households have an average retirement account balance of $255,200.
Those aren’t the same thing. The “average US household” is the household where half of all households have more, and half have less – a median, not an average. But the quoted number is clearly an average, and as such it’s going to be distorted by a small number of wealthy outliers.
Median US household retirement savings is much lower. One quarter of all US households have no retirement savings at all. The median retirement savings among all adults is only $65,000 – an even more sobering figure tham the $255,000 figure.
https://smartasset.com/retirement/average-retirement-savings-are-you-normal
Nice catch, John. I stand corrected! Sad that the “average” is even more dismal. I have deep concern for the millions of people who are going to face a very stark reality when they face their retirement years. Many just think they’ll have to continue to work, but the reality is work can be much harder to secure in your late 60’s+.
I remain startled at both how the mean and median household retirement savings amounts are so low. That means there are a ton of people out there that really cannot afford to retire. They will be in for a rude awakening when their job opportunities and/or health go south as they get older.