Fifty-five-year-old Americans are critically unprepared for retirement, more so than their older cohorts, according to a survey by Prudential Financial released June 24.
The survey found that 55-year-old Americans have median retirement savings of less than $50,000, falling significantly short of the recommended goal of having eight times one’s annual income saved by this age. Prudential calculates that recommended savings for this age group should be around $447,000.
“This group is the one that in our findings was the most financially insecure in terms of thinking about their retirement readiness,” said Caroline Feeney, CEO of Prudential’s U.S. businesses, during a panel discussion announcing the survey findings.
The group was identified as being more likely to need financial and housing support from family members. Nearly a quarter (24%) said they expect to need financial support from their family in retirement, double the percentage of 65- and 75-year-olds who said the same. Some 1 in 5 (21%) also said they anticipate needing housing support, compared with 12% of 65-year-olds and 9% of 75-year-olds.
The “silver squatters” also have a greater fear of running out of money in retirement. More than 2 in 3 (67%) worry that they will outlive their savings, compared with 59% of 65-year-olds and 52% of 75-year-olds.
Despite their uneasiness about running out of money, very few (6%) of 55-year-olds plan to use annuities in retirement, compared with 11% of 65-year-olds and 20% of 75-year-olds.
The majority (71%), however, said they are interested in annuities, presenting what Feeney said was an opportunity for the industry to help this age cohort as they begin their “10-year countdown to retirement.”
“I do view this as an opportunity for us to work with people,” Feeney said. “We believe in helping people live a better life longer.”
The survey is based on online interviews with 905 Americans ages 55, 65 and 75. It was conducted by Brunswick Group from April 26 to May 2.
