The concept of retirement may bring to mind fantasies of endless days lolling about the beach house or travels to exotic lands. The key word there is “fantasies,” since the realities of retirement are far less fetching. In fact, a few of the statistics about retirement collected by The Motley Fool are downright terrifying.
Personal savings rate: 5.8 percent
The personal savings rate stands firm at 5.8 percent, which means folks are only saving about 6 cents of every dollar they make. Not only is this paltry percentage below the average long-term savings rate of 8.5 percent, but it’s probably not enough to finance retirement for the average working Joe or Jill.
And the average working Joe or Jill most likely will be financing their own retirement, thanks to the shift away from pensions and other retirement boosts from the employer.
Debt fret: 44 percent
At 44 percent, nearly half of all retirees are fretting about debt, and perhaps with good reason. The Employee Benefits Research Institute (EBRI) says 17 percent of retirees have a greater amount of debt than they did five years back.
While mortgages and certain other debts may be OK during retirement, other debts may also be piling up – with the worry piling up right along with them. This can be particularly scary when certain essential items, such as health care, continue to be on the rise.
Medical care costs: $240,000 for two
Nearly one-quarter of a million dollars is the predicted cost for health care the average couple would need if they retired today at age 65. The stats on this one get even scarier when EBRI reports only 27 percent of retirees who have a retirement plan has more than $250,000 in it.
It’s also important to note only 66 percent of couples in retirement have one or more members who saved for retirement. Do the math and the 27 percent of the 66 percent of retirees who have more than $250,000 in their savings boils down to 18 percent of all retirees.
The $240,000 does not take into account fixed assets, such as a home, but it also doesn’t account for health care that goes above the norm, such as long-term care. This leads us to another scary stat: 70 percent of folks over 65 are expected to need some type of long-term care down the line.
Long-term care definitely doesn’t come cheap, yet one more reason to start saving more than the average 5.8 percent as you prepare for retirement.
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