What does retirement in 2024 actually look like? There’s always a risk in trying to take a snapshot of such a complicated topic as “retirement in 2024.” But recently the Wall Street Journal did precisely that, and the result forms a fascinating composite picture of how we Americans actually plan for and spend our retirement years.

The article is titled, “Here’s What Retirement Looks Like in America in Six Charts.”  While re can’t reproduce the Wall Street Journal graphics here on our Blog, we’ll do our best to summarize at least some of the information as part of our glimpse ahead into 2024. We also encourage you to visit the Wall Street Journal website to take a look for yourself. Please note that a subscription may be required to access the original article.

Retirement in 2024: An Aging Population

At the very top of the Wall Street Journal piece is a graphic that displays the most relevant statistic of all: America as a nation is aging.

Based on Census Bureau data, the article projects that, by 2030, more than 20 percent of the U.S. population will be older than 65. By contrast, that figure was at roughly 15 percent just a year or two ago, and back in 1975 when today’s baby boomers were in high school and college the figure was about 10 percent.

Not surprisingly, the thrust of the Wall Street Journal analysis is mostly financial. “Americans spend decades saving for retirement, never quite sure how much is enough or what sort of life that money will ultimately buy,” says the article. Most of the following data deals with the financial health, or lack of it, among our aging population.

Retirement in 2024: How Much is Enough?

The question, “How much will I need for a secure retirement,” haunts many prospective retirees. “Some aim to build nest eggs of $1 million, $2 million or more,” the Wall Street Journal reports, “though the majority of people have far less than that to work with.”

A turbulent economy has only added to the level of uncertainty. “The recent bout of high inflation and market turmoil have added more anxiety to the challenge of making that money last,” says the article.

Retirement in 2024: Retirement Accounts Vary Widely in Size, Health

Retirement accounts accumulated over decades of work are a cornerstone for most retirement plans – but how significant are they? “Total household balances in retirement-type accounts for those 65 and up are $407,581 on average,” the Wall Street Journal reports. That’s according to an analysis by the nonprofit Employee Benefit Research Institutebased on 2019 data.

But that average is spread widely among older Americans. EBRI reports that just under 12 percent have balances of $1 million-plus, and another 6 percent have balances of $700,000 to $999,999. On the other end of the spectrum, many aging adults in the U.S. are approaching retirement age with little or no savings at all.

It’s tough coming up with a direct statistical comparison. However, we did locate this 2022 report from the Census Bureau which revealed that half of all women between the ages of 55 and 66, and slightly less than half of all men in the same age group, have no personal retirement savings. That includes spousal accounts for married respondents.

Retirement in 2024: The Role of Social Security

“Social Security provides the other major source of income for manyretirees,” the Wall Street Journal article states. “For 12 percent of men and 15 percent of women, Social Security comprises 90 percent or more of retirement income.”  Since the program benefits roughly 90 percent of U.S. seniors, the impact of any changes or shortfalls is potentially huge.

Actual benefit amounts vary widely depending on lifetime earnings and the age at which the recipient started taking benefits. “The average [2023] benefit is currently about $1,825 a month, up 8.7 percent from last year,” the article reports. But for someone retiring at the full retirement age this year, the benefit can be twice as high, or $3,627 per month. (Social Security calculates benefits using a worker’s highest 35 years of earnings, adjusted to account for average wage inflation.)

One revealing graphic in the Wall Street Journal article shows the scope of those varying benefits. According to Social Security Administration statistics, just over 17 percent of beneficiaries receive $2,600 or more per month. But roughly 30 percent receive between $1,000 and $1,600 per month, well below the average benefit.

Retirement in 2024: Rising Health Care Costs

The good economic news for seniors is that, once they retire, spending on many expense categories tends to decline. “Retirees generally spend less on clothing, food and housing as they age,” the Wall Street Journal reports. But the bad news, which hardly comes as a shock: “Their healthcare expenses tend to rise.”  This is a cost for which many retirees remain unprepared.

The article lists the major categories of health-related expenditures. “Households headed by people 65 or older spend an average of $7,030 a year on healthcare, according to the Bureau of Labor Statistics.That breaks down to $4,974 on health insurance, such as supplemental Medicare plans, $1,077 on medical services including eye and dental care, and $726 on drugs such as prescriptions, nonprescription drugs and vitamins and $253 in medical supplies.”

One recent article on the SmartAsset website provided a sobering view of the impact of rising costs of retiree medical care. It asks, “So, how much does healthcare cost? According to a study by HealthView Services Financial, those who retired by the end of 2021 could expect to pay more than $660,000 just for healthcare during their retirement years.”  That assumes retirees will utilize Medicare as the primary insurance when possible, and that individuals to live until their upper 80s.

Retirement in 2024: What About Long-Term Care?

One glaring omission from the Wall Street Journal report that really surprised us: it made no mention of the looming costs of long-term care.

According to the website LongTermCare.gov, “Someone turning age 65 today has almost a 70 percent chance of needing some type of long-term care services and supports in their remaining years.” The average duration of care ranges from 2.2 years for men to 3.7 years for women. One senior in five will need long-term care for longer than 5 years.

Preparing for the stark reality of these costs has to be a significant component of a well-rounded retirement plan. For some reason the Wall Street Journal report omits any mention of this potentially devastating expense.

Retirement in 2024: A 24-Hour-a-Day Proposition

Preparing financially for retirement is important, but – as we have discussed repeatedly on the Blog – so is preparing mentally. How will you fill up the 24 hours in your retirement day?

“Many imagine that in retirement they will travel or pursue the interests they didn’t have time for during their careers,” says the Wall Street Journal report. “It pays to lay the groundwork for such activities years before retirement, financial advisers say.” This can involve everything from “creative daydreaming” to setting aside money in a dedicated travel budget.

But the truth is, you’ll be spending quite a lot of time doing far more mundane things than exotic travel. “On average,” says the article, “Americans ages 65 and older spent more time watching television in 2021 than was the case a decade ago. They also spent more time relaxing and engaged in leisure activities. (That’s according to the U.S. Bureau of Labor Statistics American Time Use Survey.)

Sadly, there are some negative trends in the mix. “Older adults spent less time socializing, volunteering and attending religious services in 2021, compared with 2011,” says the article.

A few specifics: the average retiree sleeps 9 hours a day and watches 4.5 hours of television. He or she also spends more than 6 hours in “relaxing and leisure” – but only half an hour “socializing and communicating.”  

Once again, we suggest that the idea of retirement with a purpose might demand a bit of forethought and intentionality. We hope this becomes part of your planning for your “post-work” future.

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at www.wsj.com)