A new study by Prudential reveals a startling statistic: 67% of 55-year-olds are severely underprepared for retirement. They fear they will outlive their savings and face financial hardship. This concern is shared by many 65 and 75-year-olds too.
The term “Silver Squatters” describes retired people who rely on family for housing and money. This is forcing a serious talk about the financial stability of older Americans. Sharon Epperson, CNBC’s senior personal finance correspondent, says longer life expectancies are part of the problem.
“There’s a lot of discussion about longevity and its impact on the economy and personal finances, particularly your retirement savings,” she shared. Many nearing retirement age have not even discussed their plans and financial needs with their families. About half of the 55-year-olds who expect support during retirement haven’t talked about it with their family members.
Epperson spoke with Prudential’s Vice Chair, Rob Falzon, to better understand the findings. You don’t necessarily think about that generation who has been providing for their own parents and their own children as then turning around and needing that help,” Falzon noted.
Retirement concerns impact financial stability
Inflation, rising housing prices, and caring for elderly parents add to the financial strain on older Americans. But Falzon said there is still time for people to take action. “At 55, they still have a decade to actually change that picture.
Making them aware of these challenges can lead to actions that prevent a ‘silver squatter‘ situation.
Other findings from the survey show the financial vulnerability of older generations. About 35% of 55-year-olds say they couldn’t put together $400 within a month for an emergency. This compares to 19% of 65-year-olds and 15% of 75-year-olds.
Dylan Tyson, President of Retirement Strategies at Prudential, stressed the need for new financial tools and strategies. “America’s 55-year-olds have the opportunity to re-imagine and protect retirement outcomes with new tools that help grow their retirement nest egg while ensuring a reliable income stream. As the retirement model evolves, preparing for better and longer lives throughout retirement is essential.”
The survey highlights the serious financial challenges faced by today’s 55-year-olds.
But with careful planning and professional financial advice, a more secure and comfortable retirement is still possible. Talking with a financial advisor can provide personalized guidance to help build a strong retirement plan and ensure financial stability in the years ahead.
