Americans Worry About Retirement Savings Shortfall: Survey
Concerns include Inflation, health care costs, a major market downturn and outliving assets, Schroders research found.
With rising prices lowering the value of savings, only 44% of retired Americans think they have saved enough and 32% are convinced they have not accumulated enough savings, according to the Schroders 2024 US Retirement Survey.
The survey found that these issues most concern retirees:
- Inflation lessening the value of assets: 89%
- Higher-than-expected health care costs: 85%
- A major market downturn that significantly reduces assets: 76%
- Now knowing how best to generate income and/or draw down assets: 69%
- Outliving assets: 68%
One-third of retirees surveyed also worried that financial stress will affect their overall health, and 26% said they have lost sleep worrying about their financial situation.
“The challenges facing retirees today are further evidence of the retirement savings crisis,” Deb Boyden, head of U.S. defined contribution at Schroders, said in a statement. “For younger generations with longer time horizons, now is the time to prioritize saving for a brighter future.”
The survey was conducted March 15 to April 5 by 8 Acre Perspective among 2,000 U.S. investors nationwide ages 28 to 79, including 498 retired Americans.
Forty-seven percent of all retirees said that their expenses in retirement are higher than they expected, and 49% believed that Medicare would cover more of their health care expenses. On average, retirees reported spending 14% of their total monthly income on health care costs, including insurance premiums, out-of-pocket expenses and prescription costs.
Fifty-eight percent of retired respondents admitted that they have no idea how long their savings will last, and 63% wished that they had done more planning before retiring.
Dream or Nightmare?
When asked to describe their financial situation in retirement, respondents gave varied responses:
- 4% said they are “living the dream”
- 44% are “comfortable”
- 34% purported to be “not great but not bad”
- 15% are struggling
- 4% said they are “living the nightmare”
Across all retirees, 38% reported that they are using a pension plan to generate income in retirement, compared with 22% who are using a 401(k), 403(b) or 457 plan. And 34% are using their spouse’s pension plan, versus 24% who are using their spouse’s 401(k), 403(b) or 457 plan.
“The corporate pension plans that are being relied upon by today’s retirees may not be there for all retirees in future generations,” Boyden said. “This shift in how Americans will be meeting their expenses in retirement moving forward underscores the urgency for bolder actions from retirement savers, plan sponsors and asset managers.”