Retiree Finances Survey - article

[Gumby]

Here is an interesting survey of retiree finances, which also ties into another thread on whether people feel they retired too soon or too late.

https://listwithclever.com/research/retirement-finances-2022/#retirement-savings

The average retiree has $191,659 in retirement funds — barely more than one-third (37%) of the expert-recommended $514,800.
In fact, only about 1 in 3 retirees (38%) have actually saved enough for retirement.
1 in 3 retirees (30%) report they have nothing in savings, and 75% of retirees have debt.

This was a survey conducted by a realtor, so they may have some bias, but it's not immediately obvious to me.

 

[pacergal]

Interesting article, would like to have known the age range.
Also interesting that a majority who RE, did so due to medical issues and medical debt is high.

 

[Sunset]

It's nice that they include the charts, as the titles of sections can be misleading, but the charts make it more clear.

Example: "73% of Retirees Who Work Do So For Extra Income or To Cover Basic Expenses"
Sounds pretty bad, but when you look at the chart it's really 31% work "To cover expenses".
Extra income is what happens when a person who doesn't need more money works most of the time.

 

[ExFlyBoy5]

Here is an interesting survey of retiree finances, which also ties into another thread on whether people feel they retired too soon or too late.

https://listwithclever.com/research/retirement-finances-2022/#retirement-savings



This was a survey conducted by a realtor, so they may have some bias, but it's not immediately obvious to me.

Looks like many of these numbers line up with other similar surveys. I think a lot of people put off saving (as they do 90% of other things) until it's too late and then are forced into retirement.

A side note: The author is *not* a realtor (or doesn't claim to be) and the company holds themselves out as a low-fee sales "alternative." Realtor is often mistaken as a sales agent/broker when in actuality, it is only indicative of membership in the National Association of Realtors. I know, not very relevant to the story itself but I wanted to come to the defense of those in the RE world that do NOT associate themselves with the NAR group.

 

[aja8888]

Surprised that 8% of retirees in this study of 1,000 responses said they have student debt.

 

[Lewis Clark]

I've always wondered how they count "retirement funds" in the many reports that get published.

Is this just IRA, 401(k), 403(b) and similar retirement accounts?

Does it account for pensions or retirement annuities?

Many of us have investments in after tax accounts. In my mind most of that money (my money, that is) is for my retirement. But do surveys like this include or ignore it? If these funds are excluded from the surveys, I think the surveys are under reporting the amount of retirement funds available.

Some folks plan to finance their retirements by selling businesses, land or other major assets. How are these accounted for, if at all?

 

[pacergal]

Surprised that 8% of retirees in this study of 1,000 responses said they have student debt.

probably Parent Plus loans for kids, would be my guess. Not many people can totally finance college expenses.

 

[W2R]

The article makes me realize how fortunate most of us ER Forum members are. For example, it's not even that uncommon for one of us to have a "mini-pension", or even a bigger pension. Also many of us have saved more money for retirement than the people surveyed in that article.

The article says that as we age and retire we spend less on dining out, entertainment, and travel. That is true for Frank and me, but I get the impression that some forum members may be spending more one these activities after retirement due to having more leisure time.

 

[ExFlyBoy5]

Surprised that 8% of retirees in this study of 1,000 responses said they have student debt.

I saw that, too. I wonder if it's debt from years gone by...perhaps getting an MBA or something later in life?

 

[ExFlyBoy5]

The article makes me realize how fortunate most of us ER Forum members are. For example, it's not even that uncommon for one of us to have a "mini-pension", or even a bigger pension. Also many of us have saved more money for retirement than the people surveyed in that article.

The article says that as we age and retire we spend less on dining out, entertainment, and travel. That is true for Frank and me, but I get the impression that some forum members may be spending more one these activities after retirement due to having more leisure time.

You aren't kidding. Our savings/retirement nest egg far exceeds the nominal amount cited as "average" and yet have one of the best pensions one can have these days. Granted, we have been big savers for many years and have had some really good luck in our investments, but we never made a ton of money w*rking yet seem to have very well for ourselves.

 

[athena53]

I've always wondered how they count "retirement funds" in the many reports that get published.

Is this just IRA, 401(k), 403(b) and similar retirement accounts?

Does it account for pensions or retirement annuities?

Many of us have investments in after tax accounts. In my mind most of that money (my money, that is) is for my retirement. But do surveys like this include or ignore it? If these funds are excluded from the surveys, I think the surveys are under reporting the amount of retirement funds available.

I agree. I do surveys for e-Rewards and sometimes the questions are well-worded, including what you have in retirement funds (IRA, 401(k) etc.) vs. after-tax funds, but sometimes they specifically ask you to exclude funds held in an employer account (presumably to measure only what assets you control 100%). If they're just tabulating amounts in brokerage accounts, mine are spread over 5 accounts in 2 brokerages. Viewed individually, some of them such as my $95,000 Roth aren't that much but they add up.

And yes, I have debt- I owe $60,000 on my mortgage. Not a big deal. I may pay it off when it gets down to $50K just to be rid of it.

 

[DrRoy]

The article says that as we age and retire we spend less on dining out, entertainment, and travel. That is true for Frank and me, but I get the impression that some forum members may be spending more one these activities after retirement due to having more leisure time.

We're spending 2-3X what we spent on travel before RE.

 

[FANOFJESUS]

So about 70% of people retire with less than 150k.

 

[lucky penny]

"Quote: The average retiree has $191,659 in retirement funds — barely more than one-third (37%) of the expert-recommended $514,800. In fact, only about 1 in 3 retirees (38%) have actually saved enough for retirement."

For quite a few retirees I know, including some relatives, $191,659 would be an undreamed-of fortune.

 

[aja8888]

"Quote: The average retiree has $191,659 in retirement funds — barely more than one-third (37%) of the expert-recommended $514,800. In fact, only about 1 in 3 retirees (38%) have actually saved enough for retirement."

For quite a few retirees I know, including some relatives, $191,659 would be an undreamed-of fortune.

We have some family members (retired) that would also be overly thrilled with that much money also.

 

[jazz4cash]

Its a case where the averages really don’t portray the distribution. Factor out 30% that have zero and the average goes from $191k to $272k. That’s getting into a substantial balance. Factor out another 30% that have < $50k and the remaining folks may be close to the recommended balance of $515.
66% of respondents have < $100k in 2022 vs 73% in 2021. So often we see its a case of haves and have-nots with not so much in the middle.

 

[pb4uski]

"Quote: The average retiree has $191,659 in retirement funds — barely more than one-third (37%) of the expert-recommended $514,800. In fact, only about 1 in 3 retirees (38%) have actually saved enough for retirement."

For quite a few retirees I know, including some relatives, $191,659 would be an undreamed-of fortune.

Yup. I have a good HS friend who is retiring in April that probably doesn't have $191k to his name. He owns a two unit apartment building that is probably worth $175k and he lives in one of the two units. And I'm guessing less than $100k in retirement savings.

Luckily, he is very frugal and LBYM and will have SS (he's 68) and rental income from the rental unit and small withdrawals from his 401k. I think he'll be ok. He also might do some part-time work.

He's tired of babysitting millenials at his current workplace and is looking forward to a change.

 

[Dtail]

Yup. I have a good HS friend who is retiring in April that probably doesn't have $191k to his name. He owns a two unit apartment building that is probably worth $175k and he lives in one of the two units. And I'm guessing less than $100k in retirement savings.

Luckily, he is very frugal and LBYM and will have SS (he's 68) and rental income from the rental unit and small withdrawals from his 401k. I think he'll be ok. He also might do some part-time work.

He's tired of babysitting millenials at his current workplace and is looking forward to a change.

Yes these types of situations can work out, but are probably in the minority.
Many folks on this forum have saved very large percentages of their income, often under 100k and are reaping their rewards now in retirement.

 

[Bamaman]

"Quote: The average retiree has $191,659 in retirement funds — barely more than one-third (37%) of the expert-recommended $514,800. In fact, only about 1 in 3 retirees (38%) have actually saved enough for retirement."

For quite a few retirees I know, including some relatives, $191,659 would be an undreamed-of fortune.

I'd hate to think about retirement with only $514K in assets.
When RMD's kick in, you are immediately in partnership with Uncle Sam.
And future out of pocket healthcare expenses have said to average about $250K--before our new high inflation kicks in.

Pray that you or the DW don't require long term nursing home care. And I'm certainly not wanting to get my nutrition from Alpo as I get further into retirement years.

 

[daylatedollarshort]

I'd hate to think about retirement with only $514K in assets.
When RMD's kick in, you are immediately in partnership with Uncle Sam.
And future out of pocket healthcare expenses have said to average about $250K--before our new high inflation kicks in.

Pray that you or the DW don't require long term nursing home care. And I'm certainly not wanting to get my nutrition from Alpo as I get further into retirement years.

Low income seniors can get Medicaid as well as Medicare. Some can get senior housing and foods stamps, plus there are many other senior / low income programs around. Medicaid pays for around 2/3 of long term care bills in the U.S. $500K in assets would be a fortune for most of the households in my hometown.

 

[ceciledian]

Surprised that 8% of retirees in this study of 1,000 responses said they have student debt.

Could be PLUS loans on behalf of their children.

 

[athena53]

Low income seniors can get Medicaid as well as Medicare. Some can get senior housing and food stamps, plus there are many other senior / low income programs around. Medicaid pays for around 2/3 of long term care bills in the U.S. $500K in assets would be a fortune for most of the households in my hometown.

It's still not pretty. My friend who works answering calls from Medicare beneficiaries who have questions hears a lot of sad stories.

Years ago the Personal Finance columnist for our local paper got a letter from someone asking why he didn't provide advice for people "who consider themselves blessed to have $50,000 or $100,000 in retirement savings". He DID give the letter writer advice: "Keep working".

I agree with you, though- $500,000 would be unusual around here. I think people just get intimidated at the numbers and don't save much at all, even those who could. I have to admit that if you'd told me at age 22 what I was going to retire on at age 61 it would have sounded impossible. Fortunately I understood compound interest and enjoyed learning about investing.

 

[old medic]

Many folks on this forum have saved very large percentages of their income, often under 100k and are reaping their rewards now in retirement.

We are one of those... well 1/2 way anyway. And partially due to great folks and info on this site. Wife is still working and putting 30% each paycheck into her 401K. We broke the 100K gross ceiling only the last 3 years, and doubtful we ever will again, maybe possible her last year with severance pay. Currently close to their "average" savings. I will admit we needed to have started earlier, saved more, but feel secure.

 

[Time2]

Many folks on this forum have saved very large percentages of their income, often under 100k and are reaping their rewards now in retirement.

Count my wife and I in this, our inflation adjusted combined income was $71k over 36 years. We saved and invested and now have assets putting us in the top 5%. We started LBYMs the very first year of marriage and never stopped.

 

[Music Lover]

I have a few friends that own businesses (they are all still working) but at least 80% of my friends live comfortably on pensions and not much else. A few of them are starting to sell their paid off homes to tap into the equity and get away from maintenance, especially the ones who like to go away for the winter and don't want the hassle of an empty home for 3 months in winter.