Retirement Spending: How Much the Different Generations Plan To Need Each Month
Whether you are nearing your golden years or have just entered the workforce, you have probably at least given a little bit of thought to retirement. It can be overwhelming to think about just how much you will need to survive once you stop receiving your normal paycheck. At GOBankingRates, we surveyed over 1,000 adults about their retirement, including how much they think they will need once they call it quits.
Less than 30% of respondents felt that they could get by on $1,500 or less each month. Nearly 20% assumed that they would need between $2,501 and $4,000. Only a small percentage felt that they would need more than $7,500, but there were some variations depending on the age and gender of the respondents.
Here is how much the different generations plan to need each month during retirement.
40% of Gen Z Think They Will Need $1,500 or Less Per Month
Of older Gen Zers (adults between the ages of 18 to 24), over 40% responded that they would need $1,500 or less each month. Of all the generations, Gen Zers were most optimistic about having an inexpensive retirement. Other age groups were less certain that they could live on around $50 per day.
It is, perhaps, unsurprising that so many of the younger generation feel that retirement won’t require much money. Many Gen Zers are just now reaching adulthood and may be leaving home for the first time, and may have yet to factor in a full slate of living expenses.
Older Millennials Think They’ll Need More
Older millennials (and younger Gen Xers), or those between the ages of 35 to 44, felt that they would need more than $1,500 each month during retirement, with 75% saying they would need more. Over 18% assumed that they would need between $2,001 to $2,500 each month through their retirement.
The only other generation to have the same concerns were boomers 65 and older. Seventeen percent of respondents in this age group felt that they, too, would need $2,001 to $2,500 per month. With boomers at or near retirement, they may be the best judges of how much it will cost them to live comfortably.
Gen Xers Were Most Likely To Say They’ll Need $1,501 to $2,000 a Month
Over 34% of the ‘sandwich generation’ assume that they will need around $1,501 to $2,000 each month, the highest percent of any generation to select that spending range. No Gen X respondents said they would need more than $7,500 per month.
A recent study found that Gen Xers may not be well-prepared for retirement. The typical Generation X household only has $40,000 saved for retirement.
More Women Assumed You’d Need Between $2,001 and $4,000 Each Month
Not only were there differences between what each generation figured they would need during retirement, but there were also variations amongst the sexes. Women were slightly more likely to think that they’d need somewhere between $2,001 and $4,000 each month compared to their male counterparts.
Around 30% of Men Believe They Will Need $1,500 or Less During Retirement
Around 30% of men feel confident that they will be able to retire on $1,500 or less per month. At only $18,000 a year, it might be challenging to find an area of the country with a low enough cost of living. However, if you have planned it right by paying off your house and reducing your expenses, you should be able to get away with a significantly reduced income once you quit your 9 to 5.
But Over 11% of Men Think They’ll Need Over $4,000
While women were more likely to think that they would need a healthy sum to cover their cost of living during retirement, more men assumed that they would need $4,000 or more each month. Over 11% of male respondents stated that they would need $4,001 or more each month.
This is on par with what most Americans assume. A recent survey reported on by The Sacramento Bee found that non-retired adults assumed they would need, on average, around $5,000 per month during retirement. In high-cost-of-living states, such as California, this probably isn’t too far from the truth.
Methodology: GOBankingRates surveyed 1,037 Americans aged 18 and older from across the country between September 5 and September 7, 2023, asking fifteen different questions: (1) How much money do you currently have saved for retirement?; (2) How much money do you think you’ll need in retirement?; (3) How much do you spend or expect to spend monthly during your retirement?; (4) If you aren’t yet retired, how much do you expect to get from Social Security during your retirement?; (5) How much of your retirement do you plan to fund with Social Security?; (6) At what age did you or do you plan to claim Social Security benefits?; (7) Did you or do you think you will have to move to afford your retirement?; (8) Which of the following proposed Social Security solutions do you think would work best to prevent the trust fund from being depleted?; (9) What sources of income will you have in retirement? (Select all that apply); (10) How confident are you that you will have saved enough to afford retirement?; (11) If you retired early, at what age did you retire?; (12) Are you counting on help from your family (financial, housing, long-term care, etc.) to afford retirement?; (13) Do you think retiring around age 65 is financially possible for most Americans?; (14) What worries you financially about retirement? (Select all that apply); and (15) If you got a stimulus check in the last two years, how much of the money did you save for retirement?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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