13 Scary Retirement Stats to Read in the Dark: 2023

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1. More than half of Americans are at risk of falling short in retirement.

According to a recent survey published by Fidelity Investments, some 52% of American households are at risk of not being able to cover essential expenses in retirement.

According to Fidelity, the retirement score for the “typical American household” is 78 out of 100, which falls into the “fair” zone. Put another way, average retirement savers are on target to have 78% of the income that Fidelity estimates they will need to cover retirement costs.

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2. More than 1 in 3 are in the retirement danger zone.

The same Fidelity report suggests that 34% of Americans have retirement scores below 65, meaning significant (and negative) adjustments to their lifestyle are likely in retirement.

This figure has climbed from 28% in 2020.

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3. Millennials' readiness has fallen by 10 points since 2020.

One of the most troubling data points in the Fidelity survey shows that Millennials now have a collective retirement readiness score of 72, which is down sharply from 82 in 2020.

Fortunately, Fidelity says, millennials have the benefit of time, so staying invested and making steady contributions — even through market volatility and recession fears — can help their retirement savings grow long-term and recover from any downturns.

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4. Just 13% of Americans achieve a "partial retirement."

According to the 2023 Life in Retirement report published by the Transamerica Center for Retirement Studies, older workers' vision of when and how they will retire is a radical departure from how retirees actually retired.

For example, 44% of older workers envision transitioning into retirement by reducing work hours in order to carve out more leisure time to enjoy life (28%) or by working in a different capacity that is less demanding and/or brings greater personal satisfaction (16%).

Only 23% plan to immediately stop working when they reach a certain age (16%) or have saved a specific amount of money (7%), and 23% also plan to continue working as long as possible.

By contrast, 41% of retirees immediately stopped working when they retired and 26% worked as long as possible. Just 13% transitioned into retirement by reducing hours or working in a different capacity.

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5. Nearly 3 in 4 retirees regret their savings behaviors.

According to the same Transamerica survey, 73% of retirees wish that they would have saved more on a consistent basis.

Reflecting on their working years, 66% of retirees wish they would have been more knowledgeable about retirement saving and investing; 49% would have liked to have received more information and advice from their employer on how to achieve their retirement goals; and 48% said that debt interfered with their ability to save for retirement.

Other findings show that 45% realized that they waited too long to concern themselves with saving and investing for retirement, while 42% agree that they should have relied more on outside experts to monitor and manage their savings.

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6. 1 in 20 Americans experiences elder financial abuse in retirement.

Data from the National Adult Protective Services Association shows that elder financial abuse is both widespread and underreported.

According to NAPSA, 1 in 20 older adults has experienced some form of financial exploitation over the recent 12 months, yet only 1 in 44 situations is ever reported. Notably, family members are the biggest culprits, with some 90% of abusers in reported cases being relatives.

According to the association, dementia plays a big role here, as the need for help with daily living activities makes victims more vulnerable to financial exploitation.

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7. Some 3 in 4 older adults foresee Social Security "drying up."

The latest Nationwide Social Security survey shows older Americans are increasingly concerned about the program's solvency in the near term, with 75% of adults age 50 and older saying they believe that Social Security will run out of funding in their lifetime.

This is up from 66% in 2014, showing how pessimism about the program has been around for many years but has grown worse over the past decade.

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8. Fewer than 1 in 10 Americans can ace a Social Security benefit calculation quiz.

According to the same Nationwide survey, Americans across the generations lack critical Social Security education.

Nearly half (49%) of U.S. adults say they know how to maximize their Social Security benefits, but only 8% correctly identified all the listed factors that determine the maximum Social Security benefits an individual can receive.

According to the survey, just over half of those with a financial professional have not been advised on Social Security or do not expect to receive such advice from their current financial professional.

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9. Medicare Part B and D premiums have topped $14,000.

Data shared by Healthview Services shows that retired Americans are grappling with persistent and significant health care cost inflation that is outstripping most other sectors in the economy.

As the data shows, a healthy 65-year-old couple would have spent $8,900 in 2011 on Medicare Part B and D premiums and other related out-of-pocket costs. Today, a 65-year-old couple will spend $14,100.

For all premiums and out-of-pocket expenses, the planning data shows the typical couple should expect just over $780,000 (future value) in total retirement health-related expenditures.

The good news here is that today’s workers and retirees can save and invest to get ahead of this problem. When one accounts for market growth, for example, the typical client couple may need only $260,995 saved at retirement to cover this expense, assuming a 6% return on their portfolio.

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10. 1 in 5 Americans are unpaid caregivers, jeopardizing their retirement prep.

According to the Employee Benefit Research Institute’s 2023 Retirement Confidence Survey, Americans’ retirement preparations can easily be thrown off track by caregiving responsibilities.

Caregivers are more likely to have lower levels of financial assets and more likely to have a problem with debt than non-caregivers, EBRI finds. Specifically, one-quarter of caregivers have less than $1,000 in savings and investments compared with 15% of non-caregivers. At the same time, caregivers are less likely to say that debt is not a problem, at 36%, compared with 48% among non-caregivers.

In addition, more than one-third of worker caregivers (35%) and retiree caregivers (37%) say they provided between $5,000 and $14,999 in financial support to their caregiving recipient in the past 12 months.

Beyond this financial burden, the role and responsibilities of being an unpaid caregiver are more likely to have a negative effect on the caregivers’ mental and physical health.

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11. 4 in 10 households inaccurately assesses their retirement preparedness.

While a majority of U.S. households have a good sense of whether they are on track for retirement, a sizable percentage of Americans are either too worried or not worried enough about their future financial security, according to an analysis published by the Center for Retirement Research at Boston College.

Overall, some 40% of households are in good shape and know it, according to the CRR, while 20% are in trouble and know it. As such, some 60% of households appear to be well informed about their retirement prospects, the CRR says, leaving 40% flying blind.

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12. Retirement account values have plunged by $50,000 on average since 2021 highs.

An analysis published earlier this year by SmartAsset shows that retirement assets held by pensions and within 401(k) plans and individual retirement accounts have experienced severe turbulence over the past three years — causing a significant degree of pain for older workers and recent retirees.

Retirement assets per U.S. household peaked at around $350,000 during the stock market’s pandemic highs in late 2021, according to SmartAsset, rebounding from the early pandemic low of $278,000.

However, with resurgent volatility on both the equity and fixed income sides of the portfolio, account values fell again through late 2022 to settle at approximately $305,000.

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13. Retirement shortfalls could cost the government $1 trillion by 2040.

Other sobering reporting from the Pew Charitable Trusts shows a lack of retirement savings among the U.S. workforce could cost the federal government nearly $1 trillion before 2040 while simultaneously putting significant strain on the budget of every state, to the tune of another $330 billion.

According to the Pew analysis, this massive amount of social spending does not fill the retirement income gap facing the American workforce, and short of a major course correction, many households will be forced to reduce their standard of living in retirement.

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1. More than half of Americans are at risk of falling short in retirement.

2. More than 1 in 3 are in the retirement danger zone.

3. Millennials' readiness has fallen by 10 points since 2020.

4. Just 13% of Americans achieve a "partial retirement."

5. Nearly 3 in 4 retirees regret their savings behaviors.

6. 1 in 20 Americans experiences elder financial abuse in retirement.

7. Some 3 in 4 older adults foresee Social Security "drying up."

8. Fewer than 1 in 10 Americans can ace a Social Security benefit calculation quiz.

9. Medicare Part B and D premiums have topped $14,000.

10. 1 in 5 Americans are unpaid caregivers, jeopardizing their retirement prep.

11. 4 in 10 households inaccurately assesses their retirement preparedness.

12. Retirement account values have plunged by $50,000 on average since 2021 highs.

13. Retirement shortfalls could cost the government $1 trillion by 2040.

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13 Scary Retirement Stats to Read in the Dark: 2023

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1. More than half of Americans are at risk of falling short in retirement.

2. More than 1 in 3 are in the retirement danger zone.

3. Millennials' readiness has fallen by 10 points since 2020.

4. Just 13% of Americans achieve a "partial retirement."

5. Nearly 3 in 4 retirees regret their savings behaviors.

6. 1 in 20 Americans experiences elder financial abuse in retirement.

7. Some 3 in 4 older adults foresee Social Security "drying up."

8. Fewer than 1 in 10 Americans can ace a Social Security benefit calculation quiz.

9. Medicare Part B and D premiums have topped $14,000.

10. 1 in 5 Americans are unpaid caregivers, jeopardizing their retirement prep.

11. 4 in 10 households inaccurately assesses their retirement preparedness.

12. Retirement account values have plunged by $50,000 on average since 2021 highs.

13. Retirement shortfalls could cost the government $1 trillion by 2040.

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