Fun Retirement Stats – How Do You Stack Up?

Fun Retirement Stats – How Do You Stack Up?

Something about statistics gets me going on a Tuesday!  I especially like seeing how I stack up in general against others.  I think it is only human nature to understand if you are average or above average.  It helps you set your sights on where you stand and can serve as a great reminder as to what the future holds.  In addition, for this financial planner understanding things such as retirement averages truly can help me and you plan for the future.  Thus, I share with you some interesting figures I got from a recent Wall Street Journal article on “Here’s What Retirement Looks Like in America in Six Charts.”  

Stat 1:  Retirement Account Savings:

The first statistic I’ll harp on is retirement savings balances.  For those 65 and up the average balance is $407,581.  Only 17.3% of those 65 and older have balances of $700,000 or more (with 11.6% of them having $1,000,000 or more.  Finally, the highest balances are typically for those aged 55-64.

Comment 1: For starters, I would not classify our clients as average, so if you are reading this and feeling good, know there is a lot more to it than these averages.  Our clients clearly are on the higher end of this, as generally as you amass more wealth you start seeking out more and more professional help. 

That said the right answer for you really is contingent on what you’ll need to live in retirement.  If you are the “average” investor in America you can probably count on roughly $20,000/yr pre-tax to be withdrawn.  If your needs are greater, likely you’ll need higher and higher amounts.  At the end of the day, this stat is most concerning to me, but not most surprising.  We have a savings issue in this country and thus I am not surprised to read this. 

Stat 2: Social Security Benefits:

With the above statistics, it is no shocker that a large swath of our country is heavily reliant on Social Security.  Most individuals take their benefit, 90%, by age 65.  That said the average benefit is $1,825/mo. 

Comment 2: As I stated Social Security is a huge resource for those retirees.  Even at the average benefit if you assume both individuals worked you can rely on over $40,000 of income in retirement from SS alone.  If you are at the higher end of the spectrum those figures can loosely double.  Remember, SS is calculated by taking one’s higher 40 quarters of earnings.  This stat also speaks to the critical importance of working with someone to make sure you really optimize your own benefit.  There is a lot to consider, as in when to take, that can make an enormous difference in your retirement plan. 

Stat 3: Health Expense:

One of the retiree’s most daunting fears is retirement costs in retirement.  Per the WSJ article people 65 or older spend on average $7,030 per year on health care expenses.  This number typically rises as one continually ages.  The $7,030 is broken out as $4,974 on health insurance, $1,077 on medical services, $726 on drugs, and $253 on medical supplies. 

Comment 3:  As you can see if you are married and retired you are likely spending roughly $14,000 plus dollars a year of your expenses on health care alone.  Remember this is simply the averages and if you assume you’ll have higher-end needs, then you can easily be looking at $20,000 plus a year in expenses allocated to your health. 

I think the most important thing to recognize is don’t sleep on this cost in your retirement planning.  Most of us don’t pay attention to it during our working years as insurance has some level of coverage through work generally, and the rest may be muted year over year.  However, in retirement, these costs turn into a major contributor to one’s budget.

Stat 4: Average Day:

This is by far my favorite statistic as candidly I have never seen this broken out like this before.  So, how does the average retiree spend a 24-hour day? 

• 9.01 hours sleeping
• 6.24 hours of relaxing & leisure
• 4.5 hours watching tv
• 1.86 hours Eating, Drinking, Grooming
• The rest is on Housework, Caregiving, Exercise, Work

Comment 4: Is this a sobering thought or what?  Work 40 years so you can retire and spend over half your days sleeping or watching tv?  Now if you are me it sounds like an amazing day, however, I think if you asked the average pre-retiree their ideal retirement it wouldn’t include watching a 30-minute show each day followed by Lawrence of Arabia (as someone who ignorantly decided to do a 7th-grade history report on the movie let me tell you I don’t wish this on anyone). 

There are two things I’ll point out in this study.  First, prior to retirement start working on those hobbies and passions.  I’ve written about it in my retirement dating blog but start today trying out activities to find how you want to spend your golden years.  If you do these years will truly be golden. 

How Average are you?

Fun right?  There are a few other statistics in the article like average Net Worth ($1,217,700 between 65-74), but I thought the four I highlighted above told an interesting enough story.  Hope you found it as fascinating as I did.

As always stay wealthy, healthy, and happy!