Over Half of Americans Think There’s a Retirement Crisis

There is a looming retirement crisis. 

It’s not a possibility. It’s about to be a reality for many Americans.

According to a survey by Clever, “Two-thirds of retired Americans say the U.S. is in a retirement crisis (66%). The average retiree owes $15,393 in non-mortgage debt, and 40% worry they will outlive their retirement savings.”¹

Those 66% have good reason to fear a retirement crisis.

Consider this information from the National Council on Aging.

“80% of households with older adults—or 47 million—are financially struggling today or are at risk of falling into economic insecurity as they age. […] Combined together, longer lives and lower savings are fueling a retirement security crisis for millions of Americans. It is exacerbated by inflation, rising health care costs, and the fact that someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and support in their lifetime.”²

The 2023 Protected Retirement Income and Planning (PRIP) study from the Alliance for Lifetime Income found: 

  • 51% of consumers between 45 and 75 feel they do not have enough retirement savings to last their lifetime.
  • 32% are not confident they will have enough money in retirement to cover basic monthly expenses.
  • 44% are retired currently or retired previously and have gone back to work.³

It’s becoming more common for people to work past age 75.

According to the Bureau of Labor Statistics, the number of people over 75 in the labor force is expected to grow 96.5% by 2030.⁴

One reason for working longer is because people are in better health for longer.

The other reason is people do not have enough retirement savings to live on.

At the same time, Clever found, “54% of retirees say they retired earlier than planned — with 82% of that group retiring before age 65. In most cases, those aren’t success stories. About 38% retired early due to health problems, and 14% were laid off.”⁵

So, retirees either worked well into their retirement years because they haven’t saved enough, or they are forced to retire earlier than planned and live on what they have acquired up to that point.

Neither option is a good one.

Read on to learn why so many Americans fear the retirement crisis and worry they will experience it. 

People Are Not Saving Enough in General

retirement crisis

The first thing to recognize is that people are not saving enough for retirement in general. 

Clever’s survey found, “The median retiree has $142,500 in savings – 4x less than the recommended minimum for starting retirement ($572,000). […] 25% of retirees have nothing saved for retirement.”⁶

There are several reasons why people are not saving enough.

  • They underestimate how much they will need for retirement. Financial planners often suggest the cost of retirement is 80 percent of your pre-retirement income.⁷ If a couple has $120,000 annual income, they should plan to bring in $96,000 annual income ($8,000 a month). However, many Americans have far less than what is needed in their savings.
  • They think Social Security will provide enough. Wrong. Go back to the previous example. The 2024 COLA adjustments mean that a couple can expect about $3,033.⁸ That’s a lot less than the $8,000 the couple needs. Where will that extra $5,000 come from to support the cost of retirement?
  • Pensions are a thing of the past. Previous generations had retirement help in the form of pensions. But, as Jason Fichtner, a senior fellow and head of the Retirement Income Institute and chief economist at the Bipartisan Policy Center, explains, “There has been a seismic shift in retirement security from a time when many people could rely on a pension in retirement. […] This is the first retiring generation in which more than half don’t have a pension to cover part of their retirement costs. That makes this the first generation where the majority must rely on their own savings efforts to prepare for retirement.”⁹

Medical Expenses and Costs of Living Are on the Rise

retirement crisis

Add in the horrifying costs of medical care, and it becomes even more clear why people are worried about a retirement crisis.

Fidelity Investments 22nd annual Retiree Health Care Cost Estimate in 2023 found, “A 65-year-old retiring this year can expect to spend an average of $157,500 in health care and medical expenses throughout retirement [or $315,000 for a couple].”¹⁰

Given the high costs of medical expenses and the lack of enough retirement savings, it’s sad but not shocking to learn that “15% of retirees say they’ve avoided medical appointments or treatments to preserve their savings.”¹¹

In addition to rising medical costs, the cost of living will continue to rise.

Some Retirees Are Already Running out of Savings

retirement crisis

Matt Brannon, the author of Clever’s research, explains, “Retirees who aren’t sufficiently prepared will have to make serious sacrifices or risk outliving their savings. […] Our survey found some retirees have skipped meals or medical care to preserve their savings. It’s not how anyone wants to spend what are supposed to be their golden years – living in financial hardship, often in poor health, with no real sense of control.”¹²

Even so, their study found:

  • 46% of retirees have no plan if their retirement savings run out, yet 2 in 5 (40%) worry they will outlive their savings entirely.
  • About 1 in 5 retirees say their savings have already run out (19%), and 1 in 10 (10%) have skipped meals to preserve their retirement savings.¹³

Do What You Can to Maximize Your 401(k)

retirement crisis

To help avoid a retirement crisis of your own, it’s time to do what you can to save more and max out your 401(k) savings.

Below are 5 tips to help you save more, keep more, and not outlive your retirement savings.

#1 Get the Company Match

retirement crisis

If you aren’t contributing enough to get your company match, you are missing out on free money.

Even a small company match, like 50 cents on every dollar you contribute up to 6% of your salary, can add up significantly over your career.

Remember, this is your retirement future that’s at stake. Do what you can today to ensure a brighter future tomorrow.

Check out 3 Reasons to Get the 401(k) Company Match in 2024

#2 Know What You’re Invested In

retirement crisis

Are you invested in the default option or a target date fund (TDF)?

Yes, target date funds make 401(k) investing easy. 

But, there can be a significant difference in performance over time from target date funds versus other plan options. 

This is because target date funds don’t take into consideration your unique retirement goals and risk tolerance. 

Know what you’re invested in and make changes if necessary to maximize your 401(k) savings.

Check out Are Target Date Funds the Best for Your Retirement Goals?

#3 Avoid Withdrawing Early from Your 401(k)

retirement crisis

401(k) hardship withdrawals should be a last resort. 

But, as recent data shows from Vanguard, Bank of America, and Fidelity, investors are playing fast and loose with their retirement savings.

The ability to take a withdrawal from your 401(k) plan may seem appealing – especially if you are facing a financial emergency.

However, a 401(k) hardship withdrawal may cost you way more than you think.

Check out The Real Impact of 401(k) Hardship Withdrawals

#4 Regularly Rebalance Your 401(k)

retirement crisis

If you are like many 401(k) investors, rebalancing your 401(k) is probably not one of your top priorities. 

But what if we told you that by failing to rebalance, you are essentially turning your investments (and future retirement income) over to chance.

Failing to regularly rebalance your 401(k) portfolio often results in significant losses during bad markets and may open you up to more risk exposure than you initially intended.

And you may be missing out on earning more and keeping more of your retirement savings.

Check out What Every Investor Needs to Know about Rebalancing a 401(k)

#5 Get Professional Help

retirement crisis

If you are looking for a way to improve your account performance, professional 401(k) management may help you in more ways than you might think.

Although you might have basic investment knowledge, utilizing an expert to make the moves that require skill and care may change the performance of your account from good to great…

And potentially boost retirement savings.

Check out How Professional 401(k) Management May Help Account Performance

If you have questions about your 401(k) or if you need help, we’re here for you. Click below to book a complimentary 15-minute 401(k) Strategy Session.

Book a 401(k) Strategy Session


  1. https://listwithclever.com/research/retirement-statistics-2024/#crisis
  2. https://www.ncoa.org/article/addressing-the-nations-retirement-crisis-the-80-percent-financially-struggling
  3. https://www.foxbusiness.com/markets/inside-americas-retirement-income-crisis
  4. https://www.bls.gov/opub/ted/2021/number-of-people-75-and-older-in-the-labor-force-is-expected-to-grow-96-5-percent-by-2030.htm
  5. https://listwithclever.com/research/retirement-statistics-2024/#crisis
  6. https://listwithclever.com/research/retirement-statistics-2024/#crisis
  7. https://www.fool.com/retirement/how-much-do-i-need/
  8. https://www.cnbc.com/2023/10/19/social-security-cola-heres-how-much-your-check-may-be-in-2024.html 
  9. https://www.foxbusiness.com/markets/inside-americas-retirement-income-crisis
  10. https://newsroom.fidelity.com/pressreleases/fidelity–releases-2023-retiree-health-care-cost-estimate–for-the-first-time-in-nearly-a-decade–re/s/b826bf3a-29dc-477c-ad65-3ede88606d1c
  11. https://newsroom.fidelity.com/pressreleases/fidelity–releases-2023-retiree-health-care-cost-estimate–for-the-first-time-in-nearly-a-decade–re/s/b826bf3a-29dc-477c-ad65-3ede88606d1c
  12. https://listwithclever.com/research/retirement-statistics-2024/#debt
  13. https://listwithclever.com/research/retirement-statistics-2024/#debt
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