More than two-thirds of retirees wish they would have saved more and on a consistent basis — and half wish they hadn't waited so long “to concern themselves with saving and investing for retirement,” according to the researchers.
For the most part, retirement does increase people's sense of wellbeing, according to the survey. About 67% of retirees who are 15 years or less into retirement said they're happier since retiring, and 82% said they're more relaxed on a typical day.
Key themes included lack of financial literacy and overspending. Many regretted not hiring a financial advisor or planning for unexpected challenges such as job loss or health issues. Others wished they had started saving earlier or been better prepared for Social Security cuts and rising medical costs.
Just 16% of retirees say they have more than $1 million saved, including all personal savings and assets, according to the recent CNBC Your Money retirement survey conducted with SurveyMonkey. In fact, among those currently saving for retirement, 57% say the amount they're hoping to save is less than $1 million.
Believe it or not, data from the 2022 Survey of Consumer Finances indicates that only 9% of American households have managed to save $500,000 or more for their retirement. This means less than one in ten families have achieved this financial goal.
Rich retirees: In the 90th percentile, with net worth starting at $1.9 million, this group has much more financial freedom and is able to afford luxuries and legacy planning.
Millennials are twice as likely as any other age band to cite childcare as a reason for not saving for retirement. The life events millennials face can have a huge disruption on their ability to save. These include parental leave, childcare commitments, becoming a homeowner and career change or break.
More specifically, the analysis finds that 66 percent of working Millennials have nothing saved for retirement, and the situation is far worse for working Millennial Latinos. Some 83 percent of Latinos in this generation have nothing saved for retirement.
On average, 63 is the ideal age for retirement according to both retirees and pre-retirees. While current retirees are hitting close to that mark with an average actual retirement age of 62, there are signs that future retirees could have more difficulty retiring at their ideal age.
According to their table, for instance, the average remaining lifespan for a 65-year-old woman is 19.66 years, reaching 84.66 years old in total. The remaining lifespan for a 65-year-old man is 16.94 years, reaching 81.94 years in total.
Senior Citizens' Saving Scheme
SCSS is arguably the first choice for most retirees.
1) Not Changing Lifestyle After Retirement
Among the biggest mistakes retirees make is not adjusting their expenses to their new budget in retirement.
Around 1 in 3 retirees say they feel depressed or down after retiring, and it makes sense. Moving from one era to the next is a huge transition, and big life events make an impact on mental, emotional and physical health.
Returns were particularly poor in 1966, 1969, 1973 and 1974. "Notably, after 1982, or about halfway through the 30-year retirement that started in 1966, the markets actually did really well," Pfau observes.
The median retirement savings of baby boomers is $202,000. Forty-three percent of 55- to 64-year-olds had no retirement savings at all in 2022, according to the Federal Reserve Board.
Debt: High levels of credit card debt, student loans, and medical bills can make it difficult to set aside money for savings. Stagnant wages: For many, wages have not kept pace with inflation and the rising cost of living, making it harder to save.
“The paradox is this: If people are living longer and we still have inflation—even at 2%—how do you account for that?” Capizzi asks. “Equities outpace inflation and provide growth, but they also create sequence risk. If the market drops right when you retire, it can devastate your retirement savings.”
“Almost half of American households will run short of money in retirement if they stop working at 65, new research predicts,” Marketwatch reports regarding a new study released by Morningstar.
Some 58 percent of Gen Z workers who know how much they'd need to retire comfortably believe that they will be able to reach it. However, this optimism seems at odds with the fact that 29 percent of Gen Z didn't contribute to their retirement in 2022 or 2023, the poll found.
Some older workers have to continue working because they have inadequate retirement savings. Other people enjoy working for extra income, social interaction or personal fulfillment.
Probably 1 in every 20 families have a net worth exceeding $3 Million, but most people's net worth is their homes, cars, boats, and only 10% is in savings, so you would typically have to have a net worth of $30 million, which is 1 in every 1000 families.
California is a popular retirement destination, but it comes with some steep costs. Those who want to live the upper middle class lifestyle there will need at least $125,000 a year in retirement — possibly more.
How Much More Social Security Do the Richest Retirees Get Compared to the Average American? Rich retirees get more Social Security than those who didn't earn as much throughout their career. And that makes sense since benefits are based on your earnings history.