These days, overwhelming student loan debt and the uncertain future of Social Security’s solvency garner most of the attention, but there’s another equally severe financial crisis looming on the horizon for millions of Americans. Thousands of people retire every day, and many don’t have the savings they need to last the rest of their lives.
When that well runs dry, they’ll need to lean on their family members to support them or seek government assistance to cover their basic living expenses. It’s a fate thousands of Americans are already experiencing, and based on data from the latest Northwestern Mutual Planning & Progress survey, tens of thousands more are set to join them in the coming decades.
While respondents in Northwestern Mutual’s 2019 survey reported better money management skills than those surveyed 10 years ago, the outlook for many of their futures remains grim. The survey found:
- 22% of Americans have less than $5,000 saved for retirement.
- 15% have no retirement savings at all.
- 56% don’t know how much money they need to retire comfortably.
- 41% are taking no steps to prevent themselves from running out of retirement savings, though many see this as a possibility.
The percentage of Americans with less than $5,000 in retirement savings actually decreased compared to last year, but 22% is still an alarming number of people without adequate savings.
The study focused on baby boomers and Generation X – the two generations next in line for retirement – and the results showed both groups have work to do. Of the 10,000 baby boomers turning 65 every day, 17% have less than $5,000 in retirement savings, and 20% have less than $5,000 in personal savings outside of a retirement account.
These numbers are even higher for Generation X, with 21% having less than $5,000 in retirement savings and 22% having less than $5,000 in personal savings. They have more time left before retirement, so it’s possible they could still increase their savings before then, but if they have less than $5,000 today, it’s unlikely they can save an adequate amount by the time they’re ready to retire.