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21 Shocking But True Statistics About Retirement

Some individuals may be in much better financial shape during retirement than the following averages suggest, but for some, these statistics about how many retirees are woefully underprepared for the financial challenges of retirement may seem like a cold bucket of water.
 
Even if an individual doesn’t succumb to these averages, they still might have time to make some adjustments to their plan so that they can avoid coming up short.
 
Here they are: 21 shocking but true statistics about the state of retirement in the United States.
 

1.       $740,000.00is the amount of assets needed to deliver an annual income of $50,000.00 per year for 25 years, assuming a 5.0% rate of return and no inflation.  However, at the end of 25 years there will not be any money left.

2.       $1 millionis the amount of assets needed to deliver an annual income of $50,000.00 per year for 25 years, assuming a 5.0% rate of return and a 3.0% inflation rate.  Once again, at the end of 25 years there will not be any money left. 

3.       $1.25 millionis the amount of assets needed to deliver an annual income of $50,000.00 per year for 25 years, assuming a 5.0% rate of return and a 5.0% inflation rate.  At the end of 25 years, once again, there will not be any money left. 

4.       45.0%of retireesdon't factor inflationinto their retirement planning.

5.       Only 13.0%of retirees  look at least 20 or more years into the futurewhen planning for retirement.

6.       21 and 17are theaverage number of years, respectively, that women and men in the U.S. will be retired.

7.       25.0% of 401(k) participants ages 56-65 had more than 90.0% of their accounts in equitiesat year-end 2007.

8.       Aretiree would receive $1,000.00 of monthly Social Security benefit if he begins collecting benefits this year, at age 62, assuming he is earning an annual income of $50,000.00.

9.       If same retiree delays receipt of Social Security benefits until age 70he will receive $1,951.00  monthly.

10.    72.0%of Social Security recipients begin collecting benefitsat age 62.

11.    34.0% of retirees rely on Social Security for 90.0% or moreof their income needs during retirement.

12.    Social Security replaces 40.0% oftheaverage wage earners' income.

13.    80.0% is arule of thumb for how much of one's pre-retirement income will be needed during retirement.

14.     A 65-year-old couple retiring in 2011 will need $230,000.00to pay for medical carethroughout retirement.

15.    John Hancockincreased insurance policy premiums on long-term care insurance policies in 2011 by 40.0%.

16.    45.0% of Americans ages 40-64believe the U.S. Government will pick up the tabfor their long-term-care needs.

17.    To be eligible for Medicaid to cover long-term-care costs in most states, generally, countable assets should not exceed $2,000.00.

18.    70.0% of Americans over age 65 will need some form of long-term-careservices during their lifetimes.

19.    Private-room nursing home care in Manhattancosts $162,000.00  in 2011.

20.    Private-room nursing home care in St. Louiscosts $60,000.00 in 2011.

21.    Theaverage length of stayin a long-term care facility is 2.4 years
 

Source:  This article was excerpted from “25 Shocking but True Statistics About Retirement”, by Christine Benz, Director of Personal Finance (Morningstar, July 28, 2011).



INDEX
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