How are American retirees faring during the pandemic?
Clever, a real estate data firm, explored that question in two surveys conducted Oct. 30 and Nov. 24 among 1,500 respondents.
“We learned that many retirees are struggling,” Francesca Ortegren, data science and research product manager, wrote in a blog post on the Clever Real Estate’s website. “On average, retirees only have $178,787 in retirement funds and hold nearly $20,000 in non-mortgage debt, with their debt more than doubling in 2020.”
Experts recommend that workers put away around $465,000 for retirement, but the average retiree has only 39% of that amount, Clever reported. Two-thirds of survey respondents reported retirement savings of less than $50,000.
According to the survey, 60% of retired respondents said they struggled to pay for necessities and bills: 47% cited medical bills, 43% groceries, 37% credit card debt and 32% mortgage or rent.
To pay their bills, retirees are adding to their debt load, the survey found. The average retiree took on an additional $9,779 in debt in 2020, increasing their debt by 104%. Non-retirees, by comparison, accumulated an additional $5,035, only increasing their debt by 13%.
Three in 10 retirees said they left the workforce at the time they had planned to do so. Of those who did not retire when they wanted to, 59% did so earlier than planned: 65% for health reasons, 22% because of job loss and 10% in order to care for a family member.
Clever noted that the coronavirus likely forced many to retire unexpectedly early as it disproportionately affected older adults.
Only 35% of retirees surveyed believed they were financially well-prepared for retirement.
Fifty-six percent regretted that they had waited too long to start saving for retirement, which Clever suggested was because they did not fully understand what they should have been doing.
About two-thirds wished they had better understood savings and investments when they were working.
As for non-retirees in the survey, 57% thought they were preparing well for retirement. Clever said this indeed appeared to be the case as the average non-retiree reported saving about 10% of his or her income for retirement, in line with what experts recommend, it said.
Clever, citing studies from the Center for Retirement Research, noted that younger generations have also started saving for retirement earlier than older generations: millennials around age 23, compared with 30 for Gen Xers and 40 for baby boomers.