Do retirees really struggle financially? Why and what to do?

I asked my friends AI, what percentage of pre-retirement income to retirees actually live on. Of course, most of the data is survey based. The answer was 66% on average. 

A T. Rowe Price/NewRetirement survey found that, nearly three years into retirement, retirees report living on 66% of pre-retirement income on average—and 57% said they live as well or better than before. 

A Goldman Sachs Asset Management survey showed retirees receive ~60% of pre-retirement wages on average, with high satisfaction (71%). 

The Center for Retirement Research (CRR-Boston College) noted many retirees get by on less than 70%, with 4 in 10 on 60% or less. Bankrate analysis put the nationwide average at ~60%. 

Interestingly, the needed percentage varies by income level.

•  Low income (e.g., under ~$50k pre-retirement):

•  Often need 80-104% replacement.

•  JPMorgan (Chase data): ~104% for $30k households.

•  Boston College CRR: ~80% target.

•  Fidelity: Higher end (~80%+) for < $50k band. 

•  Middle income (e.g., $50k-$150k):

•  Typically 70-80%.

•  T. Rowe Price: Around 73-77% across $50k-$150k, varying slightly by marital status.

•  CRR: ~71% for middle group. 

•  High income (e.g., $200k+):

•  Often 55-70% (or lower).

Social Security replaces a larger percentage for lower income. For someone earning $30,000 at FRA retirement, the replacement is about 55%. Forty percent replacement from Social Security is more typical. 

So why do so many seniors claim to be struggle financially?

Seniors feel they struggle due to a mix of real economic pressures: Fear of long-term care costs, inflation, but it is a myth retirees fully live on a fixed income (besides most Americans do not reliably receive a dedicated annual pay raise (merit, COLA, or performance-based) at their current job every year), inadequate savings and longevity are also key factors among those claiming to be struggling. 

Much of this has geographic elements. Living in North Jersey with high property taxes and other costs is much different than living in South Carolina. 

Something that should be obvious, but to many people is not, is that if you were low income, truly living paycheck to paycheck, while working, you will not be better off in retirement. 

So what is the answer? For lower income Americans the Social Security replacement percentage needs to be increased. For all others the answer in my view is enhanced financial education, better financial/spending discipline, always making savings the spending priority (perhaps forced savings in some way), and long-term realistic retirement planning. 

Taking the view that all this is a personal responsibility only and if it is screwed up, tough luck, is too common. The reality is that society pays the price sooner or later.