Many retirees and workers approaching retirement have limited financial resources, with about half of households age 55 and older having no retirement savings, according to a GAO report.
It added that many of those households without retirement savings have few other resources to draw on in retirement. For example, among those households, about 29 percent have neither retirement savings nor a defined benefit plan.
However, those households that do have retirement savings generally have other resources, such as non-retirement savings and defined benefit plans. Among those with some retirement savings, the median amount of those savings is about $104,000 for households age 55-64 and $148,000 for households age 65-74, equivalent to an inflation-protected annuity of $310 and $649 per month, respectively. Social Security provides most of the income for about half of households age 65 and older.
GAO added that studies “range widely in their conclusions about the degree to which Americans are likely to maintain their pre-retirement standard of living in retirement, largely because of different assumptions about how much income this goal requires. The studies generally found about one-third to two-thirds of workers are at risk of falling short of this target.”
Compared with those already retired, those still working at age 55 and older expect to retire later, and a higher percentage plan to work during retirement, GAO said. But it noted that one study found that about half of retirees “said they retired earlier than planned due to health problems, changes at their workplace, or other factors, suggesting that many workers may be overestimating their future retirement income and savings.”
