2024 Pulse of the American Retiree Survey: Midlife Retirement ‘Crisis’ or a 10-Year Opportunity?

Rhea-AI Summary

A new survey from Prudential Financial reveals that 55-year-old Americans are facing a critical 10-year period of preparation before retirement, with median savings falling below $50K. This generation is the first to retire without defined benefit pensions or full Social Security benefits, with 67% fearing they will outlive their savings. Women and those postponing retirement due to inflation face significant challenges, with women having less than one-third the savings of men. Despite interest in annuities (71%), only 6% currently plan to use them. Many 55-year-olds expect to need financial and housing support from family, yet 48% have not discussed it with their families. The survey emphasizes the need for strategic planning to improve retirement readiness.

Positive

• 71% of 55-year-olds show interest in annuities, presenting a significant market opportunity.
• The survey highlights an opportunity for strategic planning to enhance retirement security.

Negative

• Fifty-five-year-olds have median retirement savings of less than $50K.
• 67% of 55-year-olds fear they will outlive their savings.
• One-third have postponed retirement due to inflation.
• 35% of 55-year-olds would struggle to cover a $400 emergency expense.
• Women have less than one-third the median savings of men and are more likely to delay retirement due to caregiving duties.

Critically underprepared for retirement, 55-year-old Americans enter a crucial 10-year countdown to plan and prepare

• With just a decade until retirement, 55-year-old Americans have less than $50K in median retirement savings
• First modern generation confronting retirement without defined benefit pensions or full societal security benefits
• “Silver Squatters” to rely more on family for housing, financial support
• One-third have already postponed retirement due to persistent inflation
• Women face acute challenges, exacerbated by caregiving duties
• 71% say they are interested in annuities, but only 6% currently count them as part of their retirement strategy

NEWARK, N.J.--(BUSINESS WIRE)-- As a record number of Americans reach the traditional 65-year retirement age in 2024, a younger demographic of critically underprepared pre-retirees begins a 10-year countdown to protect retirement outcomes, according to Prudential Financial, Inc.’s 2024 Pulse of the American Retiree Survey.

Fifty-five-year-old Americans are far less financially secure than older generations, and face mental and emotional strain that extends beyond prevailing notions about the “midlife” crisis. These challenges are exacerbated by calculations that Social Security’s trust funds will be depleted as this generation reaches retirement age in 2035 — making this the first modern generation to confront retirement without full Social Security support, and in most cases without a defined benefit pension plan.

“Attention today is rightly centered on the approximately 11,000 65-year-olds entering retirement every week, but we must also focus as an industry on the opportunity to help a slightly younger generation of workers entering the critical 10-year countdown to retirement. Further, the financial futures of certain cohorts — such as women — are especially precarious,” said Caroline Feeney, CEO of Prudential’s U.S. Businesses. “The upside is that, with the right planning and strategy to protect their life’s work, we can ensure this generation is well-prepared to live not only longer, but better.”

Key findings of the survey include:

• Deep savings shortfall: Fifty-five-year-olds have median retirement savings of less than $50K, falling significantly short of the recommended goal of having eight times one’s annual income saved by this age. Two-thirds (67%) of 55-year-olds fear they will outlive their savings, compared to 59% of 65-year-olds and 52% of 75-year-olds.
• Rise of the “Silver Squatters”: Millennial and Gen Z adults who have counted on parental support will soon be paying their dues: nearly a quarter (24%) of 55-year-olds expect to need financial support from family in retirement — twice as many as 65- and 75-year-olds (12%). One in five (21%) also expects to need housing support, compared to 12% of 65-year-olds and 9% of 75-year-olds. Despite these expectations, nearly half of 55-year-olds (48%) who expect to need support have not discussed it with their family yet.
• Inflation upending everyone’s plans: One-third of 55-year-olds and 43% of 65-year-olds have postponed retirement due to inflation and higher living costs.
• Just scraping by: More than one-third (35%) of 55-year-olds say they would have trouble putting together $400 within one month to cover an emergency expense, compared to 19% of 65-year-olds and 15% of 75-year-olds.
• Women in focus: Across all age groups, women are particularly vulnerable, with less than a third the median savings of men. They are nearly three times as likely to delay retirement due to caregiving duties.
• Retirement funding gap: Amid the broader demise of defined benefit pension plans that supported prior generations, 55-year-olds are nearly twice as likely as 65- and 75-year-olds to rely on “do-it-yourself” employer-sponsored plans like 401(k)s to fund their retirement.
• Untapped annuities opportunity: Despite growing industry recognition of the importance of lifetime income strategies to retirement security, just 6% of 55-year-olds plan to use annuities in retirement, compared to 11% of 65-year-olds and 20% of 75-year-olds. Yet, 71% of 55-year-olds say they are interested in annuities, presenting the industry with a significant opportunity to strengthen their retirement security with protected income solutions.

“America’s 55-year-olds have the opportunity to reimagine and protect retirement outcomes with a new set of tools that can help them safely grow their retirement nest egg while also ensuring a reliable stream of lifetime income,” said Dylan Tyson, president of Retirement Strategies at Prudential. “With the retirement model evolving beyond traditional pensions, lump sums and Social Security, it is critical that we work together to prepare for better and longer lives throughout retirement.”

Midlife Retirement “Crisis”

At an age where they are navigating the most complex balance of career, family and retirement planning obligations, 55-year-olds face the most significant mental and emotional health challenges, particularly if they are financially insecure.

• Feeling “Just OK”: Fifty-five-year-olds are the least satisfied with their lives, rating life satisfaction just 6.2 on a 10-point scale. Seventy-five-year-olds, meanwhile, report the greatest life satisfaction (7.4), followed by 65-year-olds (7.0).
• Money matters: Fifty-five-year-olds who lack financial security are significantly more likely to struggle with mental health (53%) than those who are financially secure (33%).
• Relationship droughts: Forty-five percent of 55-year-olds find it difficult to maintain relationships as they age, significantly more than older generations (31% of 65-year-olds and 27% of 75-year-olds).

To learn more about potential retirement strategies and solutions for helping Americans live a better life, longer, click here.

ABOUT THE SURVEY

The 2024 Pulse of the American Retiree Survey was conducted by Brunswick Group from April 26 to May 2, 2024 among a national sample of 905 Americans ages 55 (n=300), 65 (n=303), and 75 (n=302). The interviews were conducted online, and quotas were set to reflect a representative population based on age, gender, race/ethnicity, educational attainment, and region. Percentages may not total to 100 due to rounding or multiple choices.

ABOUT PRUDENTIAL

Prudential Financial, Inc. (NYSE: PRU), a global financial services leader and premier active global investment manager with approximately $1.5 trillion in assets under management as of March 31, 2024, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees help make lives better and create financial opportunity for more people by expanding access to investing, insurance, and retirement security. Prudential’s iconic Rock symbol has stood for strength, stability, expertise, and innovation for nearly 150 years. For more information, please visit news.prudential.com.

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View source version on businesswire.com: https://www.businesswire.com/news/home/20240624142309/en/

MEDIA

Laura Coletti

+1 973-802-8988

laura.coletti@prudential.com

Source: Prudential Financial, Inc.

FAQ

What is the median retirement savings for 55-year-old Americans according to Prudential's 2024 survey?

According to Prudential's 2024 survey, the median retirement savings for 55-year-old Americans is less than $50K.

What percentage of 55-year-olds fear they will outlive their savings?

67% of 55-year-olds fear they will outlive their savings.

How many 55-year-olds have postponed retirement due to inflation?

One-third of 55-year-olds have postponed retirement due to inflation.

What is the interest in annuities among 55-year-olds according to the 2024 survey?

71% of 55-year-olds expressed interest in annuities, but only 6% currently plan to use them.

What challenges do women face in retirement planning according to the Prudential survey?

Women face significant challenges, including having less than one-third the median savings of men and a higher likelihood of delaying retirement due to caregiving duties.

What percentage of 55-year-olds expect to need financial support from family in retirement?

Nearly 24% of 55-year-olds expect to need financial support from family in retirement.

How does the financial insecurity of 55-year-olds affect their mental health?

Financially insecure 55-year-olds are significantly more likely to struggle with mental health (53%) compared to those who are financially secure (33%).