Sad Facts About Retirement

40 Sad Facts About Retirement (1-10)

The sad state of America’s retirement preparation.

As a whole, Americans are not doing a great job of saving for retirement. Additionally, Social Security isn’t likely to be enough to live on, and the program isn’t exactly on solid financial footing. With that in mind, here are 40 statistics that help paint a clearer picture about the current state of retirement in America.

Written by Matthew Frankel for

  • 1. Social Security is only designed to replace 40% of your income

    According to the Social Security Administration, just $4 out of every $10 of the average American worker’s pre-retirement salary will be replaced by Social Security retirement benefits. Since the Social Security formula is rather top-heavy, this percentage can be expected to be even lower for higher-income workers. Experts generally suggest that it takes about 80% of your pre-retirement income to sustain your lifestyle, so the rest needs to come from other sources

  • 2. 55% of Americans stop working sooner than planned

    Do you plan on working until age 65 or later? You’d be wise to financially prepare to retire a few years earlier. In fact, 55% of Americans end up retiring earlier than they would have liked, with health reasons being the number one cause. Other top reasons include an unexpected job loss and the need to care for a loved one.

  • 3. Only 25% of Americans say they don’t expect to work after retirement

    To be fair, many retirees work because they want to. Studies have shown that part-time employment can help keep retirees active and decreases boredom and depression. However, there are too many retirees who work into their 70s or 80s simply because they need the money.

  • 4. Only 6 in 10 workers are saving for retirement

    A recent survey by the Employee Benefit Research Institute found that only six out of every 10 workers are actively saving for retirement — either in an employer’s retirement plan or on their own in an IRA. In other words, 40% of American workers aren’t saving anything for their retirement.

  • 5. The average American’s 401(k) balance is $104,300

    Fidelity reports that the average 401(k) balance is $104,300, 13% higher than it was a year ago. This may sound like a lot, and to be fair, this includes people of all ages, not just those getting close to retirement age. Having said that, using the 4% rule of retirement savings, this amount of money can only be expected to generate $4,172 in sustainable annual retirement income.

  • 6. The average retirement savings for families aged 56-61 is $163,577

    According to the Economic Policy Institute, the 56-61 age group (which can be considered “pre-retirees”) has an average retirement savings of $163,577. Using the 4% rule, this means that people who are reaching retirement age within the next several years only have enough savings to sustainably generate about $6,500 in annual retirement income.

  • 7. Only 8% of eligible Americans contribute to an IRA

    According to recently-released IRS data for the 2015 tax year, only 8% of taxpayers who were eligible to contribute to an IRA chose to do so. To be fair, there are some good excuses — such as contributing heavily to another type of retirement account like a 401(k), but this is still extremely low.

  • 8. 20% of Americans don’t take advantage of their 401(k) match

    Several different recent surveys have found that about 1 in 5 American workers who are eligible to participate in a 401(k) plan don’t take advantage of their employer’s matching contributions. This is literally the same thing as refusing a part of your salary. One common reason is that the automatic contribution rates plans use for new hires is often less than the amount the employer is willing to match.

  • 9. Social Security will run out of money in 2034

    According to the most recent Social Security trustees’ report, unless taxes are increased or benefits are reduced, the Social Security trust fund will be completely depleted by 2034. If this were to happen, incoming payroll taxes would only be able to pay about 77% of benefits, so a 23% across-the-board cut would be necessary.

  • 10. By 2035, there will be just 2.2 workers contributing to Social Security per beneficiary

    If there was one statistic that sums up Social Security’s financial problems, this would be it. By the time the last of the baby boomer generation reaches retirement age in 2035, there will be just 2.2 workers paying Social Security tax for every person collecting benefits. This ratio has historically ranged from 3.2 to 3.4, and was 2.8-to-1 in 2016, the last year for which finalized data is available.