55-Year-Old Americans Are Facing a Retirement Crisis Amid High Inflation and Debt

Key Takeaways

A new study by insurance giant Prudential has sounded the alarm for 55-year old Americans about their readiness for retirement.With only a decade until retirement, 55-year-old Americans have median retirement savings of less than $50,000, Prudential found.Prudential projected a rise in “silver squatters” who will need to rely more on family for housing and financial support.
Insurance giant Prudential (PRU) says 55-year-old Americans are “critically unprepared” for retirement in its 2024 Pulse of the American Retiree Survey.

While a record number of Americans will reach the traditional retirement age of 65 this year, Prudential has sounded the alarm for a younger demographic who are starting a 10-year countdown to retirement. Those Americans are far less financially secure than previous generations, Prudential said in a survey released Monday, with somewhat less than $50,000 in median retirement savings.

That is significantly short of the recommended goal of having eight times one’s annual income put aside by age 60.

Facing Social Security Worries

Their projected savings shortfall could be exacerbated by calculations for the future trajectory of Social Security funds in the U.S. This is the first modern generation to potentially face retirement without full Social Security support, and in many cases, without a defined benefit pension plan.

Two-thirds (67%) of 55-year-olds surveyed said they fear they will outlive their savings, compared with 59% of 65-year-olds and 52% of 75-year-olds, Prudential said.

Those factors could lead to a rise in “silver squatters” who are forced to rely on family for housing and financial support. Nearly a quarter (24%) of 55-year-olds said they will need family support in retirement, roughly twice the proportion of current 65- and 75-year-olds who said the same.

Inflation Contributing to Delayed Retirement

The survey indicated that a third of 55-year-olds and 43% of 65-year-olds have postponed their retirement due to higher inflation and living costs. Another study earlier this month said nearly a quarter of Generation X believe they won’t be able to retire.

“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,” Dylan Tyson, president of retirement strategies at Prudential, said.

The 2024 Pulse of the American Retiree Survey was conducted from April 26 to May 2, 2024, among a national sample of 905 Americans ages 55, 65, and 75.