2024 Pulse of the American Retiree Survey: Midlife Retirement ‘Crisis’ or a 10-Year Opportunity?
June 24 2024 - 7:00AM
Business Wire
Critically underprepared for retirement, 55-year-old
Americans enter a crucial 10-year countdown to plan and
prepare
- With just a decade until retirement, 55-year-old Americans
have less than $50K in median retirement savings
- First modern generation confronting retirement without
defined benefit pensions or full societal security
benefits
- “Silver Squatters” to rely more on family for housing,
financial support
- One-third have already postponed retirement due to
persistent inflation
- Women face acute challenges, exacerbated by caregiving
duties
- 71% say they are interested in annuities, but only 6%
currently count them as part of their retirement strategy
As a record number of Americans reach the traditional 65-year
retirement age in 2024, a younger demographic of critically
underprepared pre-retirees begins a 10-year countdown to protect
retirement outcomes, according to Prudential Financial, Inc.’s 2024
Pulse of the American Retiree Survey.
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Fifty-five-year-old Americans are far less financially secure
than older generations, and face mental and emotional strain that
extends beyond prevailing notions about the “midlife” crisis. These
challenges are exacerbated by calculations that Social Security’s
trust funds will be depleted as this generation reaches retirement
age in 2035 — making this the first modern generation to confront
retirement without full Social Security support, and in most cases
without a defined benefit pension plan.
“Attention today is rightly centered on the approximately 11,000
65-year-olds entering retirement every week, but we must also focus
as an industry on the opportunity to help a slightly younger
generation of workers entering the critical 10-year countdown to
retirement. Further, the financial futures of certain cohorts —
such as women — are especially precarious,” said Caroline Feeney,
CEO of Prudential’s U.S. Businesses. “The upside is that, with the
right planning and strategy to protect their life’s work, we can
ensure this generation is well-prepared to live not only longer,
but better.”
Key findings of the survey include:
- Deep savings shortfall: Fifty-five-year-olds have median
retirement savings of less than $50K, falling significantly short
of the recommended goal of having eight times one’s annual income
saved by this age. Two-thirds (67%) of 55-year-olds fear they will
outlive their savings, compared to 59% of 65-year-olds and 52% of
75-year-olds.
- Rise of the “Silver Squatters”: Millennial and Gen Z
adults who have counted on parental support will soon be paying
their dues: nearly a quarter (24%) of 55-year-olds expect to need
financial support from family in retirement — twice as many as 65-
and 75-year-olds (12%). One in five (21%) also expects to need
housing support, compared to 12% of 65-year-olds and 9% of
75-year-olds. Despite these expectations, nearly half of
55-year-olds (48%) who expect to need support have not discussed it
with their family yet.
- Inflation upending everyone’s plans: One-third of
55-year-olds and 43% of 65-year-olds have postponed retirement due
to inflation and higher living costs.
- Just scraping by: More than one-third (35%) of
55-year-olds say they would have trouble putting together $400
within one month to cover an emergency expense, compared to 19% of
65-year-olds and 15% of 75-year-olds.
- Women in focus: Across all age groups, women are
particularly vulnerable, with less than a third the median savings
of men. They are nearly three times as likely to delay retirement
due to caregiving duties.
- Retirement funding gap: Amid the broader demise of
defined benefit pension plans that supported prior generations,
55-year-olds are nearly twice as likely as 65- and 75-year-olds to
rely on “do-it-yourself” employer-sponsored plans like 401(k)s to
fund their retirement.
- Untapped annuities opportunity: Despite growing industry
recognition of the importance of lifetime income strategies to
retirement security, just 6% of 55-year-olds plan to use annuities
in retirement, compared to 11% of 65-year-olds and 20% of
75-year-olds. Yet, 71% of 55-year-olds say they are interested in
annuities, presenting the industry with a significant opportunity
to strengthen their retirement security with protected income
solutions.
“America’s 55-year-olds have the opportunity to reimagine and
protect retirement outcomes with a new set of tools that can help
them safely grow their retirement nest egg while also ensuring a
reliable stream of lifetime income,” said Dylan Tyson, president of
Retirement Strategies at Prudential. “With the retirement model
evolving beyond traditional pensions, lump sums and Social
Security, it is critical that we work together to prepare for
better and longer lives throughout retirement.”
Midlife Retirement “Crisis”
At an age where they are navigating the most complex balance of
career, family and retirement planning obligations, 55-year-olds
face the most significant mental and emotional health challenges,
particularly if they are financially insecure.
- Feeling “Just OK”: Fifty-five-year-olds are the least
satisfied with their lives, rating life satisfaction just 6.2 on a
10-point scale. Seventy-five-year-olds, meanwhile, report the
greatest life satisfaction (7.4), followed by 65-year-olds
(7.0).
- Money matters: Fifty-five-year-olds who lack financial
security are significantly more likely to struggle with mental
health (53%) than those who are financially secure (33%).
- Relationship droughts: Forty-five percent of
55-year-olds find it difficult to maintain relationships as they
age, significantly more than older generations (31% of 65-year-olds
and 27% of 75-year-olds).
To learn more about potential retirement strategies and
solutions for helping Americans live a better life, longer, click
here.
ABOUT THE SURVEY
The 2024 Pulse of the American Retiree Survey was conducted by
Brunswick Group from April 26 to May 2, 2024 among a national
sample of 905 Americans ages 55 (n=300), 65 (n=303), and 75
(n=302). The interviews were conducted online, and quotas were set
to reflect a representative population based on age, gender,
race/ethnicity, educational attainment, and region. Percentages may
not total to 100 due to rounding or multiple choices.
ABOUT PRUDENTIAL
Prudential Financial, Inc. (NYSE: PRU), a global financial
services leader and premier active global investment manager with
approximately $1.5 trillion in assets under management as of March
31, 2024, has operations in the United States, Asia, Europe, and
Latin America. Prudential’s diverse and talented employees help
make lives better and create financial opportunity for more people
by expanding access to investing, insurance, and retirement
security. Prudential’s iconic Rock symbol has stood for strength,
stability, expertise, and innovation for nearly 150 years. For more
information, please visit news.prudential.com.
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MEDIA Laura Coletti +1 973-802-8988
laura.coletti@prudential.com
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