Are You Still Saving in Retirement? The Good Habit that’s Surprisingly Hard to Kick
For years, we have been hearing about how our generation is not prepared for retirement. In fact, the statistics are kind of scary.
According to one recent study, 33% of baby boomers have nothing saved for retirement. A further 23% have between $0 and $10,000 saves. So, this means that fully half of us have less than $10,000 saved for retirement.
Of course, savings aren’t everything. Some of us are lucky enough to have pensions. Others have no intention of retiring and – fingers crossed – we won’t be forced to! Even the least wealthy of us have Social Security to fall back on.
At the same time, it’s scary to think how many of us are living on a knife’s edge when it comes to retirement!
Well, today I want to share a couple of statistics that imply that older adults aren’t doing as badly as people think.
Yes, these numbers apply more to our parent’s generation than ours, but, it will be fascinating to see if we end up following in our parent’s footsteps!
How Are So Many Older Adults Still Saving in Retirement?
According to a recent study by the BlackRock Retirement Institute, the majority of households in the United States still have 80% of their savings after two decades in retirement. Even more surprisingly, more than 1/3 of households actually grew their savings during the same period!
Now, at this point, you are probably thinking, “Yeah, that may be true for the richest couples. But, I bet that middle-class and lower-income people ran through their cash much more quickly.”
Surprisingly, this is not what the data shows! While the highest income group retained 83% of its savings, the lowest income group retained 80%. This is despite the fact that 80% of the retirement income for the poorest group came from Social Security.
In other words, even those retirees who were relying almost entirely on Social Security managed to keep 80% of their assets over 20 years in retirement!
I don’t know about you, but, I find this statistic amazing!
Why is this Important?
At times, it feels like there is a dark cloud over the baby boomer generation. We are constantly told that we haven’t saved enough and that we are in for tough times ahead.
This is not just something that we hear from others; we also feel it in our bones. In fact, the number one fear of baby boomers is not getting cancer or dying… it is running out of money!
What this data shows is that older adults, at least those who came before us, are surprisingly resilient when it comes to surviving in retirement. If we follow in the footsteps of our parents, we will manage to hold on to our retirement savings for decades to come.
What if We Aren’t Like Our Parents?
Of course, the big caveat here is that our generation is unique. As we have written about numerous times on Sixty and Me, as a group, we aren’t willing to accept a quiet retirement and to “age gracefully.”
We want to explore, grow, learn and make a difference. So, the question is, are our expectations in line with the reality that is in front of us?
Given the statistics above, it seems like our parents did a good job of lowering their expectations and living within their means. Will we be willing to do the same? Should we be willing to do the same?
One thing is for sure, the statistics shared by BlackRock show that surviving on a small retirement income is possible. So, we shouldn’t worry about whether we can do it… we should only worry about whether we will be able to have the lifestyle we want.
And, if the answer to this question is “no,” we should look for ways to make additional money in retirement. After all, we are still intelligent, skilled and valuable people. We have so much to offer this world. We just need to get organized and take a chance on ourselves.
Have you already retired? If so, are you still saving in retirement? If not, are you worried that your savings might one day run out? Let’s have a chat!