Retirement Statistics, Trends, and Facts from Around the World
Retirement is a part of life. This milestone marks the end of one chapter and the beginning of another. As a retiree, you are no longer part of the workforce and instead rely on your savings or passive income to pay your expenses and enhance your quality of life.
Clearly, it’s in your best interest to think about retirement planning. Factors like a suitable retirement age and adequate net worth can contribute to comfortable retirement years. However, these considerations vary from person to person, which is why you need a retirement plan customized for you.
As you prepare for retirement, you might find these vital facts and figures about retirement in the U.S. and other parts of the world of interest.
What is Retirement?
Your retirement begins once you choose to leave your job and use your savings to fund expenses and enhance your quality of life.
Retirement can be life-changing. Obviously, you longer need to engage in active work after tending to your career for decades. You can use your retirement years to live less hurriedly and spend more time with family and other loved ones.
You will be able to fund your lifestyle, without a monthly paycheck, as long as you’ve built a nest egg. This is where retirement planning comes in—assessing your retirement expenses, saving for your retirement fund, and figuring out how many years you’ll need to accumulate enough wealth to support your retirement lifestyle.
Deciding When to Start Retirement Benefits and Savings
When you retire, you are rewarded for your years of hard work and tax payments. As such, you are entitled to Social Security benefits and applicable employer-sponsored pension plans, provided you meet specific retirement age qualifications.
Your Social Security benefits will vary depending on when you elect to receive them.
Full Retirement Age
The full retirement age starts at 66 for those born between 1943 and 1954. For those born in 1955 its 66 and 2 months. It inches up for each successive birth year and settles at 67 if you were born in 1960 or later.
Early Retirement Age
You can start getting Social Security benefits as early as your 62nd year. However, availing yourself of early retirement benefits will reduce your benefits once you’ve reached the full retirement age.
Delayed Retirement Age
You could delay your retirement until age 70. There are significant benefits to do so, included a delayed retirement credit, having more money available as you age and giving you additional tax planning opportunities.
Fast Facts on Retirement Planning and Saving
Here are interesting facts and figures about retirement in general.
- The current average retirement age is 66, indicating that people are working longer. The closer you are to the standard or full retirement age, the higher social security benefits you can expect.
- COVID-19 vastly impacted healthcare costs. Retirees now need an average of $315,000 over the course of their retirement to fund increasing healthcare costs.
- The majority (56%) of Americans don’t know how much money they need for retirement. This lack of awareness can lead to inaccurate and inadequate retirement planning targets.
Baby Boomer Retirement Statistics
If you were born between 1946 and 1964, you belong to the baby boomers generation. This also means you are either retired or are a few years away from retiring, although data shows baby boomers are working longer. About 29% of those in the 65–72 age bracket remain in the labor force.
Unfortunately, retirement statistics show that not everyone from this generation is adequately prepared for retirement.
- 45% of baby boomers don’t have any retirement savings and may have to rely solely on their Social Security benefits
- 40% still have credit card debt and 51% continue to make monthly mortgage payments
Retirement by Marital Status
Married couples generally have saved more for retirement than those who are single. Perhaps married couples are more likely to recognize the value of growing their retirement fund since retirement is generally considered a family affair.
At the other end of the spectrum, almost one-third of singles and 18% of married people don’t have any retirement savings. Several reasons may be contributing to this trend, including high costs of living, debt repayments, misplaced priorities, or even a lack of awareness of the significance of saving early.
Retirement Savings by Race
Minorities in the U.S., Black Americans and Latin Americans—have less retirement savings than white Americans.
Consider these statistics: Black seniors (18%) are about three times more likely to live in poverty than white seniors (6.8%).
From wage gaps to lack of employer-sponsored retirement plans, these factors aren’t helping racial minorities in the U.S. to adequately save for their future. And since these racial groups tend to invest in low-risk assets, they don’t earn higher returns needed to buttress their retirement savings.
Ideal Funds to Live Comfortably
One of the most pressing questions you must settle is what minimum net worth you should target for retirement. Here are some ballpark figures.
- To help you determine an ideal retirement savings amount, multiply your annual salary by 10 or your yearly expenses by 25, so you can stay on track with the 4% withdrawal rule.
Under this rule (which is not without its detractors), you can withdraw 4% of your savings in your first year of retirement and then adjust the amount in subsequent years based on the cost of living.
- In 2019, retirees spent an average of $47,259 annually. Yearly spending among those still employed averaged $69,099. In retirement, you may be able to eliminate expenses like transportation costs, financial support for your children or other family dependents, and life insurance to reduce your spending needs.
Your retirement costs will depend on many factors. Some you can control, like the lifestyle you choose or where you want to retire. Others may be trickier to manage, like healthcare costs and other unforeseen expenses. The earlier you start saving, the better your chance to accumulate enough assets to meet your retirement goals.
Make Beautiful Memories in Retirement
Retirement is a momentous event, signaling a new life chapter waiting to be filled with memories that only get more precious each year. All it takes is a clear vision of how you want to enjoy the fruits of your labor. A fitting way to plan for your retirement is by looking into essential factors like the age you plan to retire, how much money you’ll need to live comfortably, and how soon you should start saving.
We are here to help. Daner Wealth focuses on preparing you for your journey toward an enjoyable retirement. Contact us for more information.
Retirement is a momentous event, signaling a new life chapter waiting to be filled with memories that only get more precious each year.
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Retirement Statistics, Trends, and Facts from Around the World
Whether you’re in the U.S. or other parts of the world, you need to plan for retirement as early as possible. These facts and statistics can serve as your guide.