I have to say that this was one of the scariest things I have seen since I started writing the StuffSeniorsNeed blog 4+ years ago.
I came across the article, “Average American household approaching retirement has this much saved up” written by the Motley Fool and simply had to pass along the information because I felt it was that important.
And the results, based upon a report from the Government Accounting Office, was absolutely stunning to me.
Note: if you want to read that whole report you can here.
But if you want a graphical breakdown of the information instead the image below encapsulates the awful information rather dramatically…
As the Motley Fool article states…
This means the median household approaching retirement has a nest egg of between $10,000 and $20,000. This number is drawn down significantly because 41% of these households have no retirement savings whatsoever. (my emphasis)
Oh my God! 41% of people from age 55-64 have NO RETIREMENT INCOME?!?!?!?! I was stunned to read this.
Now, there is a bit of clarification that needs to be made for the 41%, because after all…
- 56% are homeowners, with 22% having paid off their house in full
- 32% have a defined benefit plan (i.e., a pension)
It should also be noted that these numbers do not include Social Security, but as I have written previously Social Security has its own bankruptcy problems. So I would not necessarily gamble on collecting everything that Social Security claims it is going to give you.
Note: if you are a senior retiring today you are probably OK. In the above statement I am referring to the caregivers, those in their 30’s and 40’s who will be retiring 20-30 years from now.
Those Who Are Saving
For this group, the results vary wildly, where 7% have less than $10,000 saved and 9% have over $500,000 saved.
Now The Real Question…What To Do About It?
This here, is the $64,000 question, and it is ironic that the article does not touch on the most important question, other than to promote a webinar on the topic of retirement savings.
So with this in mind, how can you stretch your retirement funds, however limited they may be?
Social Security Planning
One of the most enlightening interviews I have ever done is with a Social Security planning consultant, who explores ways for seniors to maximize their benefit. And while there have been certain changes in the laws to limit what can be done in this regard, there are still options available to you and that is why seeking out the expert advice of someone like the gentlemen I interviewed could be a great idea.
A reverse mortgage can be a lifeline for those who are financially strapped in the situation described above. I have written on many aspects of reverse mortgages and you can check out all of those articles at this link here.
Or you could look at some of the more unpleasant options, like…