The good folks over at the Secure Retirement Institute were kind enough to send us over a hard copy of the new, fifth edition of its Retail Retirement Reference Guide, chock full of 161 pages of valuable research and insights about the U.S. retirement income market.
We cherrypicked some of the facts and figures we thought 401k-focused advisors might be most interested in, with the idea that it might spur you into checking out the guide for a deeper dive into the key trends and insights (and emerging opportunities) shaping the retirement market. And these are taken only from Chapter One (“The Retirement Market”) of the five-chapter guide. Subsequent chapters include “Retirement Risks and Other Planning Challenges,” “The State of Retirement,” “Advisors and Retirement Income Advice,” and “Retirement Income Products.”
Enjoy, and remember that LIMRA members can download a copy at this link.
1. There are 55 million retirees in the U.S. (accounting for 19% of the population), a number that will increase to 71 million by 2030 and 77 million by 2035, representing a 40% increase from today.
2. Nearly 33 million Baby Boomers—one-third of all Americans between ages 56 and 74 in 2020—have already retired. That makes up about 60% of all retired Americans. As of 2020, there were more than 100 million pre-retirees (including 62 million Gen Xers and 37 million Boomers), representing a major opportunity for retirement income planning.
• SEE ALSO: Over Half of Non-Retired Boomers Fear Never Retiring Due to Pandemic
3. By 2022, the number of Americans reaching age 65 every day will rise to 11,000. By 2053 it will be 12,000 per day, and 13,000 per day in 2055. The first wave of Gen X will turn 65 in 2030.
4. Retirees drew nearly $2 trillion in income in 2019, at an average of $33,277 per retiree. The mean and median income of a fully retired household was $53,000 and $34,300, respectively.
5. Retirees and Boomer households yet to retire own 74% of all investable assets—about $34 trillion. As of 2020, Gen Xers own 23% of wealth in the U.S., up from 14% in 2016. Millennials possess just 3% of total wealth, and non-retired Baby Boomers possess 26%—down from 34% in 2016.
6. 41% of U.S. households under age 55, and 32% of households age 55 and older, have not saved in a DC plan or an IRA, nor do they have access to a pension plan.
• SEE ALSO: Retirement Plan Access is An Issue, Coverage is Not
7. The rollover market will reach nearly $760 billion by 2025, according to Secure Retirement Institute estimates. Rollover balances among investors in their 60s average around $200,000. The estimated market for retirement income products will grow from approximately $18 trillion in 2019 to $32 trillion in 2029.
• SEE ALSO: Rollover Reckoning: More Money Moving from 401ks to IRAs
8. Social Security and pensions remain the two largest sources of retiree income. In total, Social Security (37%) and pensions (23%) made up 60% of aggregate retiree income in 2019. Workplace retirement plans and IRAs made up 8% of aggregate retiree income, but continue to grow. Pension income, meanwhile, will continue to evaporate. As of 2020, 51% of the Silent Generation still had access to pension income, and 39% of Boomers had pensions. Only about 24% of Gen X, 16% of Millennials and 8% of Gen Z are expected to receive pension income.
• SEE ALSO: Lacking Pensions, Gen X Turning to Annuities
9. 71% (about 99 million) of American civilians had access to a workplace retirement plan in 2020,representing little growth in access since 2016 (70%). Only about half (51%) of private workers participated in either a DB or DC plan when available. Access to DC plans was much more common than DB plans—60% vs. 25%, respectively. Meanwhile, 83% of state and local government employees participated in either a DB or DC plan when available.
10. The median retirement savings among Americans with any retirement savings in DC plans or IRAs was $64,000 as of 2019 (meaning half of all households have $64,000 or less), while the average savings was $253,200. The discrepancy between means and medians underscores the concentration of retirement account wealth.
• SEE ALSO: Only 1 in 4 Americans ‘Very’ Confident of a Comfortable Retirement
11. More than 4 in 10 households (42%) age 35 and younger held student loan debt in 2019. Total student loan debt exceeded $1 trillion, and among households with student loan debt, the average amount owed exceeded $40,000.
• SEE ALSO: Biden Extends Student Loan Repayment Pause, Pushes Workplace Solutions
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
