AARP is out with a new survey full of frightening statistics about how unprepared many Americans are for retirement, including that more than one in four (26%) Americans over 50 but not yet retired say they expect to never retire.
“Far too many people lack access to retirement savings options and this, coupled with higher prices, is making it increasingly hard for people to choose when to retire.”
AARP’s Indira Venkateswaran
The new survey, based on interviews completed with more than 8,000 people in coordination with the NORC Center for Public Affairs Research, finds that 20% of adults ages 50+ have no retirement savings, and more than half (61%) are worried they will not have enough money to support them in retirement.
The findings also reveal a decline in overall sense of financial security among men, 42% of whom describe their financial situation as “fair” or “poor,” up from 34% in the beginning of 2022. However, roughly 40% of men who are regularly saving for retirement believe they are saving enough, compared to just 30% of women.
“Every adult in America deserves to retire with dignity and financial security. Yet far too many people lack access to retirement savings options and this, coupled with higher prices, is making it increasingly hard for people to choose when to retire,” said Indira Venkateswaran, AARP Senior Vice President of Research. “Everyday expenses continue to be the top barrier to saving more for retirement, and some older Americans say that they never expect to retire.”
Nearly one-third (30%) of older adults who carry over a credit card balance from month to month report carrying a balance of $10,000 or more, while 12% described their balance as $20,000 or more, up from 8% roughly a year ago.
Despite this, 33% of respondents ages 50+ believe their finances will be better 12 months from now, but the lingering effects of inflation and high costs are still apparent:
- More than one-third (37%) are worried about covering basic expenses, such as food and housing.
- More than a quarter (26%) are worried about covering family caregiving costs.
- Seven in 10 (70%) are worried about prices rising faster than their income.
“America is facing a serious retirement crisis. AARP has a long history of supporting legislation to expand access to retirement savings, but Congress must act more swiftly to provide the financial support older Americans need and deserve,” said Nancy LeaMond, AARP Executive Vice President and Chief Advocacy & Engagement Officer. “We have worked with 19 states to create programs to make it easier for people whose employers don’t offer a retirement plan to be able to save for their future. But about two-thirds of states have yet to act, and we await action from the federal government.”
In a press release, AARP mentioned that eight states have auto-IRA programs up and running: California, Colorado, Connecticut, Illinois, Maine, Maryland, Oregon, and Virginia, while Massachusetts has a multiple employer plan in place. Ten other states have passed legislation and are at various stages of implementation, including Washington, where auto-IRA legislation was signed into law last month.
AARP cited data saying Americans are 15 times more likely to save for retirement when they have access to a workplace plan. Yet nearly 57 million people do not have access to a retirement plan at work.
AARP noted that Congress is currently considering different pieces of legislation that could expand retirement security. One is the Automatic IRA Act of 2024, supported by both AARP and the American Retirement Association. Another is the Retirement Savings for Americans Act, which would provide retirement savings accounts to eligible workers without employer-sponsored retirement plans. AARP has also come out in support of that proposed legislation, while the American Retirement Association strongly opposes it as an attack on the private retirement plan market.
To view the full Financial Security Trends Survey and methodology, visit aarp.org/financialtrends.
SEE ALSO:
• 9 Key Findings from EBRI’s 2024 Retirement Confidence Survey
• AARP Endorses ‘Retirement Savings for Americans Act’ Opposed by ARA
• Controversial ‘Retirement Savings for Americans Act’ Reintroduced in Congress
• ‘Automatic IRA Act of 2024’ Enthusiastically Welcomed by Retirement Industry
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.
