Almost Half of Americans Expect To Retire by 65, But Their Savings Say Otherwise
Written by
Crystal Mayer
Edited by
Chris Cluff
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While many 9-to-5 workers count down the days until they can quit their morning commute, the reality is that retiring in America is expensive. To make matters worse, many people hope to retire sooner than their budget allows.
GOBankingRates asked over 1,000 adults questions about retirement, including what age they felt like they would be able to retire and how much money they had in savings. Almost half of the respondents (48%) expect to be ready to retire at age 65 or sooner, but few have enough savings to do so.
About 61% of the people surveyed said they had less than $50,000 saved for retirement. Under most circumstances, people will need substantially more to retire comfortably.
GOBankingRates asked experts to comment on the discrepancies between our respondents’ retirement goals and financial preparedness, including how much people should save and what they can do if they haven’t saved enough.
At What Age Do People Feel Like They Can Retire?
Nearly one-quarter (23%) said they would be able to retire early, and 24% responded they would be ready by age 65. This means that just less than half of those surveyed believe they will be in a position to retire prior to or at the average retirement age.
How Much Do People Have in Savings?
When asked how much they currently have saved for retirement, well over half admitted that they had less than $50,000, including 28% who said they had nothing saved at all. Just over 10% had saved between $50,000 and $100,000, which is still likely significantly under what it would take to live comfortably throughout retirement.
How Many People Have Enough Saved for Retirement?
While our survey indicated that 61% had insufficient retirement savings, it also showed that some respondents are well on their way to a healthy financial future. Over 5% of those surveyed said they had more than $1 million saved for retirement, and another 3% responded that they had $750,001 to $1 million in retirement savings.
Is Retirement Out of Reach?
While almost half of those surveyed said they would be able to retire at 65 or earlier, almost 30% believe they will never be able to retire. The fear is not uncommon, given the extraordinary cost of living in the United States.
As reported by CNBC, 62% of people are living paycheck to paycheck. Another recent survey by GOBankingRates revealed that 70% of Americans go check to check. This makes it incredibly difficult to set aside money for retirement or even to just build an emergency fund.
How Much Should People Save To Retire Comfortably?
Jake Hill, CEO of DebtHammer, explained, “Most people dream of early retirement; but, if you haven’t kept up with your retirement savings, even retiring at 65 may be a challenge. The average 65-year-old needs to have saved nearly 10 times their annual gross income to retire comfortably, but a vast majority of people are far from reaching that goal.”
Ann Martin, director of operations of CreditDonkey, noted, “By the time you reach 65, you should have at least eight times your annual gross income saved for retirement. If you haven’t met this milestone, you are far less likely to be financially ready to retire.
“Social Security will help with some expenses, but the average person will still need to supplement about 60% of their monthly costs with other income,” Martin added. “People who have little to nothing saved for retirement aren’t as ready to retire at 65 as they may believe.”
What Can People Do to Save More?
“If your retirement savings are seriously lagging, committing to a more aggressive approach can help you make up some ground before you reach your ideal retirement age,” Hill said. “However, it is better to wait to retire until you can confidently afford to do so.”
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