Three out of five people have less than $100,000 saved for retirement; only 4 percent have more than $1 million set aside, according to a new report from data firm Property Shark, “Housing America’s Older Adults — Florida, Traveling & Roommates.” The financial health of the largest generation of seniors ever is a concerning aspect for the financial health of the country itself.
U.S. Census data shows that, by 2030 one in five Americans will be 65 or older; by 2035, older adults will outnumber children in yet another historic first. But the massive demographic changes brought on by lower birthrates paired with increased longevity will make their mark even earlier: by 2020, for every retirement-age adult, there will be 3.5 working-age adults. Fast forward 40 years and, by 2060, that ratio will be 1:2.5.
Of those who have saved for retirement, 28 percent of adults 45 and older have invested in 401(k)s, 15 percent in real estate, 9 percent in IRAs and 3 percent in annuities exclusively. The most common option, though, is a combination of these — a full 45 percent of respondents have diversified investments.
Additionally, the more money someone has saved, the more likely it is to be in a combined form of investments. Only 26 percent of those with less than $100,000 in savings have multiple types of savings, compared with 96 percent of those with more than $1 million put away. For those with less than $100,000 saved, 401(k)s are the most popular option; 35 percent chose this for their nest egg, followed by 26 percent with combined savings, 24 percent with real estate, 10 percent in IRAs and 5 percent with annuities.