12 Retirement Statistics That Should Scare You

Planning for retirement is a daunting task, particularly if you’re dealing with a tight budget for everyday expenses such as food or gas. It’s also likely you haven’t considered some important and sobering retirement realities.

Understanding what you will face during retirement will help you avoid making foolish money mistakes as you save for your post-work years.

Following are some realities — and statistics — to consider.

Women have an average retirement savings of $57,000, according to the Retirement Industry Trust Association. Their male counterparts, however, average $118,000 in savings.

That huge discrepancy can make it more difficult for women to retire compared to men, causing women to work longer to save up enough money so they can retire comfortably.

Do you know how much you need in retirement accounts before you can ditch your job for good? If the answer is “no,” you aren’t alone.

In fact, 43% of workers in the U.S. say they are only guessing when deciding how much they need to save in order to retire, according to the Retirement Industry Trust Association.

Instead of guessing, create an estimated budget for your retirement needs. Remember to include everyday costs like housing and utilities and one-time costs like traveling. You also may want to set a goal of revisiting your budget every few years as you get closer to retirement and priorities change.

To date, 47% of baby boomers have retired, according to the Retirement Industry Trust Association.

But in 2019, right before the COVID-19 pandemic, only 11% of boomers said they had saved up at least $500,000 in their retirement savings accounts.

American retirees might assume that Medicare will cover all their medical costs. But that is not true.

In fact, an average retired couple who is both age 65 and retired in 2022 might need an estimated $315,000 in retirement funds to cover medical bills during retirement, according to research from Fidelity Investments.

Medicare doesn’t begin covering medical expenses until you turn 65 years old. However, the average retirement age in the U.S. is 62, according to Fidelity Investments.

That leaves a three-year gap between the age many folks retire and when Medicare kicks in. These folks will have to be covered by some type of health insurance, the cost of which may have to be financed via retirement funds.

Even after Medicare kicks in, it will not cover all your health care expenses. So, factor in any additional costs for health insurance when you create a retirement budget.

You may be adding money to a 401(k) or 403(b) plan in hopes of saving for retirement. But then what?

In fact, 37% of employees who are 25 or older say they don’t know where to go to get retirement planning advice, according to the Employee Benefit Research Institute. And 19% of retirees have expressed the same concern.

Start talking to a financial planner now and check out your options when looking at your retirement future. Check with your company’s human resources department to see if it offers financial planning as part of your retirement benefits package.

You may have dreams of retiring on the beaches of California or Hawaii, but remember to take into account the cost of living in your dream retirement home.

Retiring in cities like San Francisco or Honolulu may require you to have more than $1 million in savings if you are going to live comfortably.

Some Americans have discovered that retirement might not mean you no longer have to work at all.

A survey found that 64% of workers said they expect to continue working after retirement, according to a MagnifyMoney survey.

Continuing to work at least part-time after you retire can help cover unexpected costs or allow you to contribute additional funds to your nest egg if you don’t believe you have saved enough upon retirement.

Some retirees consider Social Security to be a significant part of their budget plan for retirement. But the average monthly check for a retiree on Social Security is less than $1,600.

Remember that your monthly payment can also vary greatly depending on the age you decide to start collecting Social Security. Do some research to see how much bigger your monthly check might be if you defer Social Security until later in your retirement years.

The notion of saving several hundred thousand dollars — at least — just to retire probably sounds daunting. In fact, nearly 30% of Americans between the ages of 55 and 67 have less than $10,000 in retirement savings, according to a recent survey from Sagewell Financial

Given that reality, it might be a good idea to sit down with your current budget and find small ways to add money to your retirement accounts.

Retirees who haven’t planned properly for retirement may face another tough challenge: bankruptcy.

Since 1991, the rate at which people 65 and older file for bankruptcy has tripled, according to a 2018 study from the Consumer Bankruptcy Project.

Some factors that may be a part of this increase include declines in income and increasing medical expenses, according to the study.

You may think you don’t have to worry about a mortgage in retirement, but that is not necessarily so. A 2017 survey by American Financing found that 44% of retirees still carried a mortgage.

Preparing for retirement can be a scary thing. However, making plans now can help you better understand how much you need to save so you can supplement your Social Security payments during your golden years.

Sit down with a budget and think about your plans for spending money in retirement. You may want to consider everyday costs — including health care expenses — as well as one-time items like traveling or purchasing a new home.

Once you know how much you will need to save, start exploring ways to generate extra income today.