Retirement Statistics: Then vs. Now

Retirement statistics: Then vs. now

How long will $1 million last in retirement?

Is this truly the worst time to retire? Bankrate took a look at some key factors to determine what today's new retirees are up against. What follows are some key statistics that don't bode well for the boomer who's planning to retire today.

Timing is everything. A typical portfolio (60% stocks, 40% bonds) enjoyed great success in the 1980s. A retiree could have withdrawn 4% a year and still watched the investment grow, thanks to a confluence of strong yields, bull market returns and low inflation. That wasn't the case in other years. A similar portfolio from which funds were withdrawn beginning in 1960 and 1970 each would have run out of cash before 30 years elapsed, due to high inflation. In 2013, low starting yields are expected to shorten the life span of a $1 million portfolio to 25 years. Some investors wonder, is the golden age of retirement gone?

Inflation: Then vs. now

Annual inflation over 30 years

Decades ago, high inflation made it tougher for retirees to live off of their investments. Someone who retired in 1960 or 1970, for example, would have dealt with an average annual inflation rate of about 5% over the next 30 years.

Real returns: Then vs. now

Real return, 30 years

A typical 60-40 portfolio of stocks and bonds has posted a range of returns over the past several decades. It's impossible to say how the market will perform in coming decades. Given today's low yields, however, Research Affiliates -- which helps clients with indexing and asset-allocation strategies -- calculates that the return on a 60-40 portfolio will likely be much lower over the next 30 years than it was for someone who'd invested in a similar portfolio in 1960, 1970 or 1980.

Personal savings: Then vs. now

Personal savings rate in the US

The personal savings rate has been on the decline for the past 30 years, according to statistics from the Bureau of Economic Analysis. Americans are currently saving roughly 4 cents on the dollar of disposable income. That's less than half of what they were saving in the 1970s and 1980s.

Standard of living: Then vs. now

Standard of living in retirement

Retirement experts say there's a growing gap between the amount of money people need to retire, and what they actually have in the bank. The Center for Retirement Research at Boston College measures that gap with its National Retirement Risk Index, which estimates the portion of working-age families that are at risk of being unable to maintain their standard of living in retirement.

Health care costs: Then vs. now

Out-of-pocket health costs

The cost of staying healthy continues to rise. The Centers for Medicare & Medicaid Services estimates that the out-of-pocket expense will rise by more than $300 per person over the next decade.

Population increase: Then vs. now

Population 65 years and older by size and percent of total population: 1900 to 2010

The number of Americans age 65 and older has jumped over the past century, and that will continue as the baby boomer generation reaches retirement age.