55-year-old Americans are “critically underprepared” for retirement and have a 10-year countdown to change that, survey finds!
A recent study done by Prudential, based on Brunswick Group’s “2024 Pulse of the American Retiree Survey” data, reveals that many 55-year-old Americans approaching retirement age are “critically underprepared”. The data shows that 67% of them fear they will outlive their savings, compared to 59% of 65-year-olds and 52% of 75-year-olds. Shockingly, they are on a crucial 10-year countdown to change that and have a median retirement savings of less than $50,000.
These financial concerns may lead to a rise in “silver squatters” – older adults who rely on family for housing and financial support -. The study also found that 24% of 55-year-olds expect family support in retirement. However, nearly half of them haven’t discussed this with their families.
“You don’t necessarily think about that generation who’s been providing for their own parents and providing for their children as then turning around and needing that help”, said Rob Falzon, vice chair of Prudential Financial.
Gen X is often caught between supporting their children and caring for aging parents. Simon Blanchard, a marketing professor at Georgetown University, noted that this dual responsibility can feel overwhelming. He emphasized the importance of managing negative emotions about money to avoid disengagement from financial planning or risky financial behavior.
“If you’re asking them in the moment how much financial support they’re going to need, they’re looking at their kids on the one hand, and then they’re looking at their parents on the other side. It feels very daunting”, Blanchard said.
What To Do Now
It’s crucial for those nearing retirement to communicate their needs and expectations to family members. Financial therapist Lindsay Bryan-Podvin suggests starting the conversation by discussing how retirement plans might impact the family, rather than making demands.
“This doesn’t mean telling them ‘I’m going to move in with you’ or ‘I’m expecting that you will supplement me financially. It’s much better to start the conversation with something like, ‘I’m getting closer to retirement age, we need to have a serious conversation about what that’s going to look like for me and how it might impact us together'”, Bryan-Podvin explained.
For pre-retirees with children at home, it’s important to prioritize retirement savings over funding children’s college education.“Your child has the gift of time”, Bryan-Podvin added. And parents, on the other hand, may face unexpected job loss or health issues leading to ealier retirement.
Bryan-Podvin encourages rethinking traditional retirement plans: “I think for so long, the default has been to buy a house to age in place and hope that everything works out”. She pointed out new trends like having roommates (“boommates”) or cooperative living that can provide financial and emotional support.
Experts advise getting a clear understanding of your financial situation, including expected income from Social Security and other sources, to cover daily expenses. Maintaining a positive mindset is essential. Investment advisor Gregory Marc Corneille suggests that believing in the possibility of a comfortable retirement is the first step toward achieving it.