Initial findings from an upcoming Society of Actuaries (SOA) report suggests that pre-retirees and retirees are struggling to save for retirement today compared to 2021.
The survey, which gathers insights from U.S. retirees and pre-retirees ages 45 to 80 and of all incomes, revealed preliminary insights that show that retirees are less likely to say they are “better off than expected” in 2024 compared to three years ago.
Rising inflation, coupled with caregiving priorities and unexpected financial hits, have led some to feel less financially prepared for retirement, explains Anna Rappaport, past SOA president and current chair of the SOA Committee on Post-Retirement Needs and Risks.
“In response to rapid societal change and a population that is still re-adjusting after several years of the COVID pandemic, this year’s survey explored several new areas of emphasis. These include the impact of familial caregiving support on retirement planning, effects of inflation and the role of AI and other emerging technologies,” she said.
According to the SOA findings, the rate of savings and investments are not keeping up with the pace of inflation, with 78% of pre-retirees and 58% of retirees expressing concern.
Others, like 51% of pre-retirees and 35% of retirees, are having trouble keeping up with day-to-day expenses. Forty-five percent of pre-retirees and 29% of retirees say they can barely afford utilities, and 44% of pre-retirees and 27% of retirees have trouble providing for their lifestyle.
Some have been hit by unexpected financial crises. Twenty percent of retirees and 35% of pre-retirees say they’ve experienced a financial shock that resulted in a loss of over 25% of assets.
This has caused these individuals to adjust their savings strategies, and particularly for those making less than $100,000 per year.
Currently, 13% of male and female pre-retirees provide care or have provided care to loved ones who are not minor children, while 38% say they are unprepared to offer any help for a family member’s medical emergency or health issue. When asked about the top impact of caregiving responsibilities, male and female pre-retirees (36% and 26% respectively) and female retirees (35%) cited emotional and/or physical toll, while male retirees (14%) cited long-term care planning.
“I’m concerned respondents might be overestimating their level of preparedness,” said Rappaport. “The costs and caregiving obligations connected to a medical emergency or health issue can be very high. Even though inflation rates have come down, many are still affected by high prices for housing and groceries.”
SOA’s full Retirement Risk Survey report will be published in early 2025.
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
