The best way to ensure you have money in retirement is to not retire at all.
Most workers — 53 percent — are either planning to retire after the traditional retirement age of 65, or not retire at all, according to the Transamerica Center for Retirement Studies.
While 14 percent of workers are planning to live until the ripe age of 100, their money won’t last them that long.
“Many workers are not saving enough to amass the financial resources required to support their vision of retirement, while others are at risk of poverty,” says TCRS president Catherine Collinson. “Given increases in longevity, working as long as possible is a practical solution. However, it’s unclear whether employment opportunities will be available.”
The TCRS retirement survey found that the definition of retirement is changing a bit, as hitting “retirement age” doesn’t necessarily mean Americans are financially ready to give up work. Most workers are bogged down with debt, so they don’t feel they will have enough money to pay off debt and maintain a lifestyle where they don’t work. Gen Xers and millennials are more likely to say debt is their biggest urgency, while baby boomers feel saving for retirement is their top priority.
How much to save?
TCRS says retirement income should last retirees at least two decades, but the amount most people have saved is far from comforting: most baby boomers have $164,000 in retirement savings, while Generation X averages $72,000. Millennials have saved an average of $37,000. Even for those pulling in $40,000 a year, Business Insider says you’ll need at least $1 million to retire.
It’s just not going to work for most people. Americans are outliving their retirement savings — as you can see, they just aren’t saving enough. While we’re living longer, our money can’t keep up with us. Because of this, we are more scared about running out of money over dying. Living too long without any financial resources is making a lot of people hope they die sooner rather than later.
Since most Americans don’t feel financially prepared to live to 100 years old, it’s no wonder they will keep working long after hitting “retirement age.” More than half of baby boomers and Gen Xers surveyed in the TCRS survey say outliving their retirement is one of their greatest fears (47 percent of millennials don’t think they’ll be able to have basic financial necessities when they hit retirement age).
While older Americans have saved more than their younger peers, it doesn’t mean they will have enough to retire. You will probably spend more than you think you will when you retire, and probably won’t save enough. You’ll need your retirement savings to last you until you die, regardless of when that is. Unfortunately, there aren’t enough work-related retirement plans in place for people to feel like they are getting the right help to retire comfortably (let alone at all).
“Today’s workers are expecting to live long lives and, in doing so, they are disrupting retirement as we once knew it,” Collinson says. “Many are envisioning retirement as a new chapter in life that involves continued work but with more free time to pursue personal interests.”
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