New Study Shows Retirees Are Increasingly Cash-Strapped

An instructor helps an 83-year-old man as he works on his laptop computer in Des Plaines, Ill., in this file photo. Tim Boyle/Getty Images

An alarming combination of insufficient savings, inflation, credit card debt, and earlier-than-expected retirement trends has put today’s seniors in a complex financial state that has lowered expectations of life after work, a new study by the Employee Benefit Research Institute (EBRI) shows.

According to the study, 31 percent of retirees said they have been spending much more or slightly more than they can afford in 2024, compared with 27 percent in 2022 and 17 percent in 2020.

The study also found that retiree credit card debt has increased substantially, with 68 percent reporting having outstanding credit card debt compared with 43 percent in 2020.

In addition, the study found that in 2024, retirees rated their lifestyle alignment with retirement expectations at 5.7 out of 10, down from 6.4 in 2022 and 6.8 in 2020. As for their retirement satisfaction with life, the average was 6.9 in 2024, down slightly from 7 in 2022 and 7.4 in 2020.

The study also highlighted a large proportion of retirees who were worried not only about money but also about the timing of retirement.

“About half of the survey participants were retirees who might have been eligible for guaranteed income because of their prior employer but had health reasons, disabilities, or a job restructuring which led them to retire early. In other words, they retired for reasons beyond their control,” Bridget Bearden, a research and development strategist for EBRI, told The Epoch Times.

The study also noted that the current economy is hitting retirees especially hard.

“Inflation was the No. 1 reason they are not spending what they want to,” Bearden said. “They’re also stressed about no spending down the assets they had accumulated and worried about future inflation in addition to unexpected volatility like credit card debt.”

Seniors Are Working Past 75

With the U.S. population getting older, the percentage of workers in the labor market ages 75 and older continues to grow. According to the Bureau of Labor Statistics, this rate is expected to grow from 8.9 percent in 2020 to 11.7 percent in 2030.

According to some, the numbers might reflect that seniors lack the savings needed to retire successfully when forced into early retirement because of company layoffs, closures, or reorganizations.

“My best advice is to find another job and work until you die. ... people have undersaved too much,” Laurence J. Kotlikoff, an author and a professor of economics at Boston University, told The Epoch Times.

He said a lack of planning has been a significant contributor to the peril in which retirees find themselves today.

“They’re not planning because people think Social Security and their employers will take care of them, which is certainly not the case. Half the people showing up in retirement are losing their jobs or getting fired or invited to leave because of ageism or even thinking they deserve to retire,” Kotlikoff said.

“Most people are taking their Social Security [at the] age of 65, and that’s miles too early. Because of that, the typical American household is leaving $182,000 on the table.”

However, labor economist and retirement security expert Teresa Ghilarducci told The Epoch Times that working through your supposed retirement years is unrealistic.

“Our bodies wear out, and our ability to work fades as you age,“ she said. ”Plus, the technological advances in today’s jobs make many skills obsolete, even if you were physically and mentally able to do the job. There’s no evidence employers want older workers because of skills updates and company profitability.”

Alternatives to Living Alone

Another variable that seniors must consider is how long after retirement they’ll live. According to the Social Security Administration, today’s 65-year-old can expect to live another 20 years.

The National Council on Aging determined that living independently without assistance as a retiree is “out of reach for most older adults,” as nearly 50 percent of adults ages 60 and older have household incomes below the standard needed to afford basic needs.

Years ago, younger family members took care of seniors to cut costs. Still, those generations are now struggling to find a home big enough for their families, and that opportunity to combine households is becoming rare.

“People used to say they could just move in with your kid, but a lot of people are unlikely to have kids with an extra bedroom,” Ghilarducci said.

Bearden said seniors and retirees should learn from younger people, not move in with them.

“I’m hearing that some younger generations are more likely to cohabitate for financial reasons and share houses with friends,“ she said. ”If there are seniors living by themselves in apartments, they’re more likely to have health issues. It might be time to consider different living arrangements and find roommates.”