Last year, retirees lost an average of 10% of their accrued savings for retirement. The average retirement savings dropped from $191,659 in 2022 to $170,726 by the start of 2023, according to a survey conducted by Clever Real Estate.
The survey also shows that the share of retirees who have nothing saved jumped from 30% to 37% during the same time period.
“The consequences are clear,” the report states. “The latest Census data puts the share of U.S. seniors living in poverty at a 20-year high, and the economic turmoil of 2022 threatens to raise the number even higher.”
Per the report, about 12% of survey respondents have at least $555,000 saved for retirement. The survey included 1,000 Americans of retirement age who were polled in November 2022.
Nearly half of the retirees surveyed (48%) believe it is likely they will outlive their retirement savings, according to the report, and 57% were surprised at the costs of retirement. About 60% of survey respondents said they blamed their employers for not adequately preparing them for retirement.
“The lack of savings is not unique to retirees,” the report states. “Due, in part, to inflation, the U.S. personal savings rate is the lowest it has been since 2005, according to Federal Reserve data. However, unlike working Americans, retirees have few opportunities to raise their income.”
This may be one reason why Americans aged 65 and older recorded a statistically significant uptick in poverty rates in 2021, according to the report.
“Retirees often enter their later years without realizing how much money they’ll need to spend in retirement,” the report states. “Nearly 3 in 5 retirees (57%) say the cost of retirement surprised them. The average retiree’s household spends $51,048 a year — $4,254 each month, according to U.S. labor statistics. The high cost of retirement may explain why 48% of retired Americans believe they’ll outlive their savings.”
Retirement anxiety is one of the main issues the reverse mortgage industry has emphasized while attempting to appeal to a broader base of potential borrowers. Data regarding an increase in withdrawals from retirement accounts recently signaled a potential opportunity for reverse mortgage professionals to make a case for the product.