If you are a retiree who finds it tough to make ends meet, join the club.
Retiree households had an estimated median income of just $29,000 before taxes in 2019, according to the 20th annual Transamerica Retirement Survey of Retirees.
Even worse, just over 1 in 4 retiree households — 27% — reported an income of less than $25,000.
Altogether, 56% of retiree households brought in a pre-tax income of less than $50,000, while a lucky 13% earned at least $100,000.
The survey findings for 2019 pre-tax household income break down as follows:
- Less than $25,000: Reported by 27% of survey respondents
- $25,000 to less than $50,000: 29%
- $50,000 to less than $75,000: 14%
- $75,000 to less than $100,000: 9%
- $100,000 to less than $150,000: 9%
- $150,000 to less than $200,000: 2%
- $200,000 or more: 2%
Among the survey respondents, 6% declined to answer the income question and 2% were unsure of their pre-tax household income.
The statistics paint a sobering picture of the reality of retirement for millions of people, says Catherine Collinson, CEO and president of the Transamerica Institute and Transamerica Center for Retirement Studies:
“Many retirees were forced into retirement before they were ready, which shortened their working years, extended their time in retirement, and left them more financially vulnerable. Retirees have been getting by, but they risk outliving their savings.”
These scanty incomes make it more challenging for retirees to pay off household debt.
Transamerica found that 46% of retiree households have nonmortgage debt, such as credit card, car loan, student loan or medical obligations. In addition, 23% of households have mortgage debt.
Planning your retirement
Saving early and often gives you the best chance of avoiding the same fate as millions of today’s retirees. But even if you are starting to save later in life, you can still build up a substantial nest egg. For more, check out “5 Ways to Save Up $500,000 in 15 Years.”
Another way to prepare for post-work life is to enroll in Money Talks News’ retirement course. This 14-week boot camp offers everything you need to plan the rest of your life so that you will have enough to make your retirement dreams a reality.
The course is intended for those who are 45 or older, but even younger folks can benefit from the wisdom to be gleaned from these lessons. The earlier you understand the lay of the land, the sooner you can start saving. And starting to save earlier makes everything so much easier down the road.