If you're busy socking away money for retirement, that's good. But you might not be socking away enough, and you might not know some important retirement-related details.
Here are 18 statistics related to retirement that you should know. Many can help you save more money or bring in more.
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To be classified as being in poverty according to federal guidelines, you have to be pretty poor. For a family of four, with two adults and two children, the poverty threshold was recently $24,339 in annual income. For seniors without children, the number is even lower. As of 2016, 9.3% of those 65 and older lived in poverty, according to U.S. Census data.
Between 2005 and 2015, the number of Americans 60 or older with student loan debt quadrupled, according to a 2017 Consumer Financial Protection Bureau study. In 2015, these folks owed more than $66 billion.
Almost a third of Americans 50 or older are saddled with non-mortgage debt, such as from credit cards. Those with such debt are carrying an average of $4,786 in credit card debt and $12,490 in total non-mortgage debt, according to the Health and Retirement Study from the University of Michigan Retirement Research Center.
Those 55 or older recently made up 20% of the people filing for bankruptcy. Seniors have been the fastest-growing group of such filers in recent years. If you're wondering why, note that about 62% of personal bankruptcies were due to medical expenses, per a 2015 Harvard University study.
According to the 2017 Retirement Confidence Survey, about 24% of workers (and fully 21% of retirees!) said they had less than $1,000 saved for retirement. A whopping 55% of workers and 38% of retirees had less than $50,000. Check out the full findings:
While 20% of workers had socked away $250,000 or more for retirement, a more impressive 38% of retirees had done so. That may seem great, but $250,000 won't take many people too far in retirement. And even, say, $400,000 can be too little. Consider, for example, that if you plan to withdraw 4% annually from your nest egg for retirement income, you'll get only $16,000 per year from a $400,000 war chest and $10,000 from $250,000.
If you're behind in your retirement saving and you plan to just work a lot longer than many others, think again. Many people end up not having a choice regarding when they retire. Indeed, about 48% of retirees left the workplace sooner than they had planned, according to the 2017 Retirement Confidence Survey. Some 41% of them did so because of health problems or disability, 26% cited company downsizings or closures, and 14% had to care for a spouse or other family member.
Given the stats above, it may not surprise you that the most common age at which people start collecting Social Security benefits is the earliest age at which they can: 62. The most common age at which people retire is 63.
Starting to collect Social Security before your full retirement age (which is 67 for those born in 1960 or later) will leave you with checks that are up to 30% smaller.
On the other hand, if you wait to collect your benefits as long as you can -- to age 70 -- they will grow by about 8% for each year beyond your full retirement age that you wait. Delay from age 67 to 70 and you can enjoy checks that are 24% larger.
When you start collecting probably won't make as much of a difference in your total benefits received as you may think, though -- because the system is designed to be a wash for those with average-length lives: While the checks that start arriving at age 70 will be much larger, you'll receive 36 fewer checks overall than if you'd started collecting at 67.
By the way, it's helpful to know just how much money we're talking about. The average monthly Social Security retirement benefit was recently $1,375, or just $16,500 per year. The overall maximum monthly Social Security benefit for those who retired at their full retirement age in 2017 was still just $2,687 -- or roughly $32,000 for the whole year.
A 65-year-old couple retiring today will spend, on average, a total of $275,000 out of pocket on healthcare, according to Fidelity Investments. Clearly, it's important to factor healthcare expenses into your retirement planning. Medicare can be great, but it doesn't cover everything.
If you're late enrolling for Medicare, your part B premiums (which cover medical services, but not hospital services) can rise by 10% for each year that you were eligible for Medicare but didn't enroll. The no-penalty enrollment period for most people is anytime within the three months leading up to your 65th birthday, the month of your birthday, or within the three months that follow.
If you think the 10% penalty above is bad, know that if you don't take your required minimum distributions (RMDs) from retirement accounts such as traditional IRAs and 401(k)s that require them, you can face an excise tax of 50% of the amount you failed to withdraw. The deadline to take your distribution each year is Dec. 30, except for the year in which you turn 70 1/2, when you get a little more leeway.
Since Social Security probably won't be enough to fully support you in retirement and relying on investments that could fall in value at inopportune times can be stressful, consider buying a fixed annuity or two, which will provide reliable pension-like income. A $100,000 annuity purchased at recent rates could give a 65-year-old man around $6,720 per year. Here's the kind of income that various people might be able to secure with an immediate fixed annuity in the current economic environment:
Your retirement savings may need to support you for a very long time. "About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95," says the Social Security Administration.
Let's end with a bit of good news. Many of the statistics above are shocking and depressing, but the news isn't all bad. If you have some time and the ability to save aggressively, you might still be able to improve your retirement significantly. The table below shows what you might accumulate over several periods if your investments average 8% average annual growth:
Don't leave your retirement to chance. Plan and save effectively, and read up on helpful strategies. For example, there are lots of ways to increase your Social Security benefits.
The $16,122 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,122 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.
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