The number of people who will outlive their savings and retirement nest egg is extremely high. This is particularly true for people with modest savings who retire in their 60s. A number of these people will live another 20 years.
According to the Census, people between 85 and 94 years old grew from 5.1 million in 2010 to 5.7 million in 2020. The second number is 40% higher than the population of the city of Los Angeles. There were 631,000 Americans over 94 years old alive in 2020. These numbers will grow as baby boomers age and medical care for the oldest Americans improves.
Among the primary problems older Americans have is that they have a poor understanding of how long they will live. According to The Hill, “In a 2022 survey by the insurer TIAA, one-quarter of Americans underestimated the life expectancy of a 60-year-old. Another 28 percent said they didn’t know it.”
About 40% of Baby Boomers don’t have retirement savings. They must rely on Social Security payments, which average about $2,000 monthly. Beyond that, millions of Baby Boomers don’t have savings that will allow them to keep the lifestyles they had at 60.
One critical aspect of aging is the need for more medical care. This can be extremely expensive. Social Security will cover most of this in some cases. But “some” may not be enough for people who need long-term care.
What are the solutions? One is that people will continue to work beyond the normal retirement age of 65. Some will not keep their current jobs because they will “age out” of what employers expect their workforces to look like.
Older Americans will need to turn to other work. In millions of cases, this means taking a job with hourly wages, often the low wages paid by retailers and fast food companies like Starbucks and Walmart. These jobs pay poorly compared to what most people made when they were under 65. Some pay as little as $15 an hour.
Millions of Americans won’t be able to retire at 65. Some will be working at Walmart when they are 75 and perhaps older. (This is what it costs to retire in every state.)
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