43% of Retirees Say They’d Rather Die Than Go Bankless — Here’s Why They’re Struggling
Americans heading into retirement face a huge gap between what they have saved and what they believe they need – a gap that has grown by nearly half a million dollars.
A recent study from Clever Real Estate suggests that retirees now estimate they need an average of $823,800 in savings and investments to retire comfortably by 2026. That’s a dramatic increase from last year, when respondents put the number at $580,310.
Meanwhile, the average retiree reports having just $288,700 saved.
The findings are the result of a survey of 1,000 retired Americans.
Retirees fear national disaster
From personal finances to the broader economy, retiring Americans are concerned about the nation’s financial well-being.
About 64% of survey respondents say the US is in a retirement crisis, and only 41% believe retirement will happen for the average American in 25 years.
About 45% say they didn’t prepare enough, and the same number worry they will outlive their savings.
Meanwhile, 51% admit they don’t have a plan if their money runs out, and 43% say they’d rather die than face that financial reality.
The key is to stretch the budget
Retirees report spending more on essential expenses, leaving less room for the leisure activities and travel many associate with their prime years.
Almost half of the respondents say they are struggling to pay the bills. Here are the biggest pain points, according to the survey, and the percentage of respondents citing them as a financial struggle:
- Groceries: 28%
- Utility bills: 22%
- Credit card debt: 18%
- Insurance claims: 17%
- Taxes (income taxes, property tax, etc.): 17%
- Phone, internet and cable bills: 16%
- Medical bills, prescriptions, copays, appointments, etc.: 15%
- Transportation (car maintenance, repairs, etc.): 14%
- Gasoline: 12%
- Mortgage or rent: 12%
When groceries, utilities and medical bills consume an increasing portion of a fixed income, a retirement lifestyle that seemed attainable a decade ago may feel out of reach.
This pressure on discretionary spending may explain why many retirees have revised their estimates upward to determine what constitutes a comfortable retirement.
Some retirees are struggling
Financial stress is forcing many retirees to make more sacrifices. To preserve dwindling savings, 14% of respondents say they avoid appointments or treatments, and 12% admit to skipping meals.
Income instability is putting some back into work. About 31% of retirees say they have considered returning to work part-time or full-time for a living.
This reliance on additional income comes from government benefit caps. Although 90 percent of retirees receive Social Security, it accounts for 57% of typical retirement income — and for 22%, it is their only source of income.
Meanwhile, traditional safety nets are disappearing, with retirement funds like 401(k)s and IRAs now overtaking pensions as the most common sources of income.
Survey results show that more than one-third of retirees are not sticking to a budget despite rising costs. And about the same number say they still help older children or grandchildren financially.
Big challenges still await retirees
This savings shortfall points to larger challenges as more baby boomers leave the workforce and more Americans face retirement with insufficient resources.
Whether this leads to policy changes, changes in the way families support older members or more retirees working longer than planned remains to be seen. However, these numbers suggest that the gap between retirement dreams and retirement reality isn’t closing anytime soon.
For anyone thinking about retirement, now is the time to plan and take action.
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