12 Retirement Statistics Every Pre-Retiree Should Know (A Bird’s-Eye View Of America’s Retirement Landscape)

When you buy something after clicking a link on this site, we may earn an affiliate commission.

Retirement is not passive income. It’s more like a milestone, a point in a timeline. A pinned point in a workers’ life map where the harvest of passive income begins according to the seeds of labor one has planted.

In other words, retirement itself is not defined as passive income. But, having passive income to live on is a necessary component of being retired.

The average person in the US spends over half their life at work. And after decades of backbreaking labor, they get one shot at retirement—their golden years.

The golden years – it’s supposed to be an active adventure. For those that plan and save, the golden years can be the best years of their life. For others, it can be a really difficult and stressful time.

Whether you’re planning for it now, for later, or not at all, you’ll be pleasantly surprised by what these retirement statistics show about America’s retirement landscape.

1.) Many Would Like To Have A Retirement Plan In Place, But Only 12% Actually Do

Having a written retirement plan with details can give you a clear view of your future and allow you to see what will happen. You can refer to it and stay on track by reviewing it from time to time. Having this reference at hand should allow things to go smoothly.

Many people who don’t have a retirement dream often get distracted and exchange their long-term retirement happiness for short-term comfort.

About 7 In 10 have not written their retirement dream.

2.) Top Reasons For Retiring (Not All Are Voluntary)

In deciding when to retire, most retirees indicated that their preferences played a role, but life events contributed to the timing of retirement for a substantial share.

federalreserve.gov

Personal reasons may include a shift in one’s daily activities, a desire to slow down, or following the death of one’s spouse. Many of these are completely personal and it’s something only the individual can decide on. Retirement means different things to different people.

  • 48% Want To Do Other Things
  • 45% Have Reached The Ripe Age For Retirement
  • 29% Have Health Issues
  • 15% Have To Take Care Of Family Members
  • 14% Dislike Their Work
  • 11% Are Forced To Retire For Lack Of Work
retirement-statistics-do-other-things

3.) 64% Of Americans Believe They Would Still Need To Work After Retirement

Many people in the US are feeling that they may never be able to live off their social security retirement benefits. Social Security is a big part of the life savings for many Americans. Nearly 60% of the US population will rely on it as their primary source of income in retirement. A retired worker receives an average of $1,657 per month as a Social Security benefit.

With the average retirement lasting longer than 17 years, many people choose to remain in the workforce post-retirement, and for good reason—Social Security is only designed to provide a basic income.

4.) 57% Of Americans Believe Their Retirement Lifestyle Will Be Comfortable

The majority of workers still feel optimistic about retirement despite the rapid rise in prices of essential services and products. Eight out of ten pre-retirees are not concerned about their future. However, 70% of millennials are the only generation that is stressed and anxious about saving for retirement.

A near record high 57% of nonretired Americans now expect that they will have enough money to live comfortably in retirement while 41% do not.

gallup.com

5.) A 65-Year-Old Retiree Has A 50% Chance Of Reaching The Age Of 80 Plus

This means that people who are 65 years old will live to be 80 or older. The life expectancy in retirement is increasing with an average retirement length of 18 years, but many Americans are not saving enough. The median retirement savings for people aged 55 – 64 is $120,000.

With the younger generation putting off retirement to save up more money, they need to plan for 2 decades or more of income in retirement.

6.) The Best States For Retirement

There are many things to consider when choosing the perfect place for you to live in retirement. Factors such as healthcare, cost of living, climate, and proximity to family members can all play a role in deciding where retirees will call home. Here are the 10 best states that pre-retirees are considering the most.

  1. Florida
  2. California
  3. Texas
  4. Hawaii
  5. Colorado
  6. New York
  7. North Carolina
  8. Arizona
  9. Georgia
  10. Nevada

7.) What 65% Of Pre-Retirees Look Forward To In Retirement

For Gen Xers and Millennials, Travel is one of their most looked-forward to retirement activities. While 39% of Gen Xers had longed for travel within the US, Europe was listed as the top location for 34% of Millennials on their list of travel destinations.

10.) Nearly 60% Of Americans Are Unaware Of How Much Money They Will Need For Retirement

Many Americans do not know how much money they will need in retirement. Although there are rules of thumb to refer to when saving for retirement, there are also a number of personal factors to consider. The approach to retirement is different for everyone and what may work for others may not be enough for you.

The 25x rule is commonly used to figure out an estimate of how much you need to save for retirement. It’s as easy as deciding how much you need to live comfortably in 1 year, multiplying that by 25.

9.) The Top 5 Sources Of Income For Retirees

81% of retirees have diversified their retirement income by making use of one or more income streams. Although Social Security is still the main source of income for retirees, not everyone relies on Social Security as their only source of income in their retirement plan.

  1. Social Security
  2. Pension Fund
  3. Interest, dividends, or rental income
  4. Wages, salaries, or self-employment
  5. Cash transfers other than Social Security

8.) 2 Out Of 3 Workers Have Student Loan Debt

In 2022, the total student loan debt in America will be $1.7 trillion, and has continued to grow since then. With a higher education system that leaves many students with crippling debt and no degree, it is no surprise that 2 out of 3 workers have student loan debt that affects their retirement savings.

According to a study by the Association of Young Americans (AYA) and the AARP, 31% of baby boomers claim that loan debt has either hindered their retirement saving efforts or caused them to prematurely dip into their nest egg.

investopedia.com

11.) Only 1 In 3 Americans Has More Than $100K Saved For Their Retirement

Americans are living longer and staying healthier than ever before, but they are still behind when it comes to saving for their retirement.

Just over 1/3 of all Americans have more than $100K saved for retirement. The 22% have accumulated less than $5,000 in their retirement account and are not prepared for their senior years.

12.) So Where Do Most Pre-Retirees Set Up Their Savings?

As young workers approach the beginning of their careers, it is a good time to start setting aside money for retirement. But where do most pre-retirees bet their money on for retirement?

  • 68% Rely on their Employers to arrange their Savings for Retirement
  • 55% Use a regular Savings Account in a Bank
  • 54% Have a 401(k)
  • 20% Traditional IRA
  • 19% Roth IRA
  • 19% Certificate of Deposits
  • 17% Life Insurance Policies

How do these retirement statistics stack up for you?

It doesn’t matter if you’re planning your retirement for now or for later. You can live a more secure and stress-free retirement lifestyle by establishing passive income sources early on.

According to some of the retirement statistics listed above… how do you stack up? Are you on track to have enough passive income for your golden years?

Traveling to exotic places, restoring that old Mustang convertible, learning a stringed musical instrument, or scuba diving… The possibilities for things to do during your golden years are truly endless.

Remember, retirement itself is not defined as passive income. Your golden years should be an active adventure that is fueled by the passive income streams that you’ve built for your future.

What is Passive Income?

Passive Income can be defined as an income received on a regular basis, with little effort required to maintain it.

Alvin Medalla
Alvin Medalla
Alvin is a WordPress wizard and an all-around website ninja. He is the content manager, research specialist, image expert, and statistics aficionado - here on the Dumb Passive Income blog.
Alvin Medalla
Alvin Medalla
Alvin is a WordPress wizard and an all-around website ninja. He is the content manager, research specialist, image expert, and statistics aficionado - here on the Dumb Passive Income blog.