Retirement Readiness

WHAT’S THE STATE of America’s retirement readiness? Here’s a quick look at some worrisome statistics—as well as some key notions that should concern both those saving for retirement and those who have already quit the workforce:

• You can get a glimpse of America’s retirement readiness from the Federal Reserve’s 2022 Survey of Consumer Finances. Among households headed by someone age 65 to 74, 76.1% owned their home, down from 85.8% nine years earlier. Moreover, 64.8% were carrying some form of debt, including 32.2% who had debt secured by a home. Just 51% of this group had an IRA or similar retirement account and the median balance was $200,000. That’s enough to generate some $670 a month in retirement income, assuming a 4% withdrawal rate.
• Among households headed by someone age 55 and older, 29% had neither savings in a retirement account, like an IRA or 401(k) plan, nor were they covered by a defined benefit pension plan, according to a Government Accountability Office study.
• Just 11% of private sector workers were covered by a defined benefit pension plan as of 2023, compared to 75% for state and local government workers, according to the Pensions Rights Center. But 49% of private industry workers participated in a 401(k) or similar plan, compared with 18% for government workers.
• The National Institute on Retirement Security found that a quarter of households headed by someone age 55 to 64 had a net worth—the value of all assets, including their home, minus all debt—that was less than their annual income. By contrast, experts often suggest amassing a sum equal to 8 to 12 times income by retirement, and that sum doesn’t include home equity.
• According to the Employee Benefit Research Institute’s 2025 Retirement Confidence Survey, workers on average expect to retire at age 65. But it turns out the actual retirement age is typically 62. The study also found that 75% expect to work for pay once they retire, but only 29% of retirees report doing so.
• Those quitting the workforce in 2025 will spend almost 20 years in retirement, on average, up from less than 14 years in 1970, says Boston College’s Center for Retirement Research.
• Delaware, West Virginia and Georgia are the best states to retire, says Bankrate. The ranking is based on five criteria, with the biggest weight given to affordability. Meanwhile, WalletHub says the best states to retire are Florida, Minnesota and Colorado. The WalletHub ranking considers affordability, health care and overall quality of life.
• Social Security retirement benefits average almost $24,000 a year. An estimated 97% of seniors either receive Social Security or will receive it. Social Security benefits provide half or more of the income for 51.8% of folks age 65 and older. For 24.7% of seniors, Social Security accounts for 90% or more of their income.

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