State of Retirement Finances: 2021 Edition

Dr. Francesca Ortegren's Photo
By Dr. Francesca Ortegren Updated April 10, 2023


What you should know...

  • Retirees have only about 39% of the recommended savings and, as a result, have accumulated more debt (nearly doubling it in the last year alone) and taken on part-time jobs to cover living expenses.
  • Many retired Americans wish they saved differently while they were working and are now worried they'll outlive their savings.

Most Americans work throughout adulthood with the hopes of retiring from the workforce someday. Ideally, the milestone is achieved when one is young enough to enjoy their work-free lives without worries about finances or debt.

Unfortunately, half of U.S. households can’t maintain their pre-retirement standard of living throughout retirement.[1] Many Americans are forced to tighten budgets and give up luxuries during retirement, partly due to dismal savings and an upward trend in financial struggles among more than 80% of households with adults older than retirement age.[2]

That decline in household wealth is particularly concerning during a pandemic that has disproportionately impacted the health of older adults. Infection can lead to unexpected costs related to acute or long-term healthcare, loss of the ability to live independently, and the death of a partner. Many don’t have the means to cover a financial shock, and even fewer have a cushion to fall back on.

The grim financial security for those in retirement begs the question: How are American retirees faring during the pandemic?

To answer this question, we surveyed 1,500 Americans about their retirement funds, debt, and financial worries.

We learned that many retirees are struggling. On average, retirees only have $178,787 in retirement funds and hold nearly $20,000 in non-mortgage debt, with their debt more than doubling in 2020.

Key Insights

The average retiree has $177,787 in retirement funds — only 39% of the recommended savings.

Retirees more than doubled their debt in 2020 and have accumulated an additional $9,779 in debt on average.

59% of retirees retired earlier than planned, and 65% of those who retired early did so because of health issues.

Only 35% of retirees think they prepared adequately for retirement, and 1 in 4 are worried they’ll outlive their retirement savings.

16% of retirees have to work part-time because their retirement funds and social security aren’t enough to cover expenses.

Current retirees think they’ll be more comfortable throughout their retirement than their parents and children.

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The Average Retiree Has $177,787 in Retirement Funds — Just 39% of Recommended Savings

Retirees rely on a variety of sources to finance their retirement, including retirement funds and social security income.

The most common sources of retirees' income include:

  • Social security (33%)
  • Personal savings (32%)
  • Retirement fund, including 401k, Roth IRA, etc. (31%)
  • Company / employer-funded pension plan (19%)
  • Other investments, including CDs, stocks, real estate (17%)
  • Part-time employment (12%)
  • Financial support from government agency other than SSI (9%)
  • Income from consulting / self-employment (6%)
  • Inheritance (6%)
  • Financial support from children (4%)

Experts recommend that workers save approximately $465,000 for retirement.[3] The typical retiree in our survey, however, reported having less than $180,000 in retirement funds, despite expecting to have expenses for 20 more years. Two-thirds of retirees have less than $50,000 in retirement funds.

Sparse retirement funds leave many retirees reliant on social security income (SSI) to cover their expenses. In fact, nearly 60% of older adults’ household wealth comes from social security, which is less than ideal considering SSI is only about $1,514 per month on average — much less than the typical spending of about $3,900 monthly.[1][4][5]

Unsurprisingly, many retirees aren’t sure if they’ll be able to leave inheritance to their heirs after their passing: 28% said they won’t have enough money to pass on, while another 29% said they’ll pass on what they have but aren’t purposefully saving to do so.

Retirees More Than Doubled Their Debt in 2020

Many Americans are living beyond their means as a result of the lack of income sources. According to the Bureau of Labor Statistics, retirees’ average post-tax income from all sources is about $39,591 annually, which doesn’t even cover typical spending ($47,259).[5]

The $7,700 difference between income and expenditures means many are falling behind despite living relatively modestly, as the majority of retirees live below the standard of living they experienced prior to retirement. The average worker, for instance, spends more than $63,000 annually.[5]

Instead, retirees are spending less than they did before retirement while still spending more than they earn. In fact, nearly 60% of retirees said they struggle to pay for necessities and bills.

More specifically, those who said they can’t always cover expenses have trouble paying for:

  • Medical bills (47%)
  • Groceries (43%)
  • Credit cards (37%)
  • Mortgage / rent (32%)
  • Insurance (29%)
  • Debt repayment plans (22%)
  • Car payments (19%)
  • Student loans (11%)

In order to cover those bills, retirees are going into debt. The average retiree said they have about $19,200 in non-mortgage debt.

Retirees increased their debt by 104% in 2020 alone, compared to an increase of only 13% for non-retirees.

Although they’re holding on to less debt than non-retirees, who have an average of about $44,000, retired Americans have been hit harder financially the past year: The average retiree took on an additional $9,779 in debt 2020, increasing their debt by 104%. Non-retirees, on the other hand, accumulated an additional $5,035, only increasing their debt by 13%.

Some of that increased debt is due to more people carrying credit card debt. In fact, the percentage of retirees carrying credit card debt has increased over the last decade, including a 48% increase between 2019 and 2020.[6]

59% of Retirees Retired Earlier Than Planned, Including 65% Who Retired Early Because of Health Issues

Only about 3 in 10 retirees actually retired when they planned. Of those who didn’t retire when they planned, 59% reported retired earlier.

Although an early retirement sounds ideal on the surface, only 3% retired early because they had additional wealth, while the overwhelming majority were forced into retirement because of health issues (65%) or job loss (22%) or because they had to care for a family member (10%).

Forced early retirement can leave retirees in a tough spot financially, as they simultaneously lose out on time they planned to save for retirement and have longer retirements to cover expenses. That’s even more troubling for those who left the workforce due to illness, as they will have additional medical expenses to cover, as well.

The COVID-19 pandemic has likely contributed to an increase in unexpectedly early retirements and worries about health, considering the virus disproportionately impacts older adults.[7]

Unsurprisingly, 1 in 3 retirees said they fear declining health that requires long-term care. Their concerns aren’t unfounded, as complex medical issues are more common in older age, with 1 in 6 requiring medical care for more than five years, which can cost more than $260,000.[8] Those long-term care expenses can add up to more than what retirees have saved for their entire retirement.

The high costs associated with healthcare aren’t just a worry for retirees — they’re a reality. Of those who reported having trouble paying for their expenses and bills, nearly half (47%) said they’re struggling to pay medical bills— more than any other type of cost.

Retirees are most worried about:

  • Medical issues that require long-term care (33%)
  • Being a burden to their family (28%)
  • Losing independence (28%)
  • Cognitive decline (23%)
  • Isolation and loneliness during retirement (20%)

Retirees’ health concerns might be exacerbated by the current pandemic’s disproportionate impact on older adults, as many reported being worried about their physical health (52%) and their family’s health (62%) as a result of COVID-19.

Retirees' COVID-19 worries include:

  • Family's health (62%)
  • Physical health (52%)
  • Finances (30%)
  • Mental health (30%)
  • Loneliness / lack of social interactions (26%)

Only 35% of Retirees Think They Prepared Adequately for Retirement; 1 in 4 Worry They’ll Outlive Their Savings

Only slightly more than one-third of retirees believe they were well-prepared financially for retirement, while most wish they saved differently.

The majority (56%) said they waited too long to start saving for retirement, likely because they didn’t really understand what they should have been doing. About 63% said they wish they better understood savings and investments when they were working.

The lack of financial education during their working years has led to concerns about finances during retirement: Nearly one-quarter of retirees said they’re fearful of outliving their savings.

Other financial concerns include:

  • Social security ceasing to exist (42%)
  • Difficulty accessing affordable healthcare (21%)
  • Leaving family with debt (20%)
  • Not being able to meet the basic needs of their families (18%)
  • Difficulty acquiring affordable housing (15%)

An interesting juxtaposition is that 57% of non-retirees think they’re preparing for retirement well.

That actually does seem to be the case, as the average non-retired respondent in our survey reported saving about 10% of their income for retirement, which matches up well with what experts suggest.[9]

Younger generations have also started saving for retirement earlier than older generations: Millennials started saving around 23, compared to 30 for Gen Xers and 40 for baby boomers.[10]

That’s not to say all non-retired Americans are saving appropriately: 19% reported saving nothing from their income for retirement.

16% of Retirees Work Part-Time, and Nearly Half Work by Necessity

Struggling to make ends meet has forced some to seek employment during their retirement: 16% of respondents said they earn income from part-time employment, contract work, or self-employment, including 9% who had to find part-time employment because of the pandemic.

The top reasons for employment during retirement include:

  • Retirement and social security are not enough to cover expenses (48%)
  • For the social interaction / something to do (37%)
  • Additional discretionary income (35%)
  • Employee discount or other perks (32%)
  • They enjoy the work but don’t need the additional money (30%)
  • Additional money for heirs (22%)

Although post-retirement work isn’t ideal, there’s some good news for retirees searching for employment: The average employer values older workers as much as — if not more than — younger workers because they’re viewed as more productive.[11] The perception that older workers are more productive has increased significantly since the mid-2000s.[11]

Older Americans looking for work can find listings in a variety of occupations, with the majority falling into occupations that are typically associated with older workers.[12] According to an analysis of, the large majority of listings for retirees in late 2019 were for the following job categories[12]:

  • Office or administrative support (15%)
  • Healthcare support (14%)
  • Computer and mathematics, e.g., programming (10%)
  • Transportation and material moving (9%)
  • Healthcare practitioners, management, and food preparation or serving (7%)
  • All other occupations (<5% each)

The analysis also found that jobs listed on the retiree job site offered lower pay on average ($43,800 annual salary) compared to job sites aimed at the general public ($50,000).[12] Moreover, jobs recruiting older workers were less likely to offer fringe benefits, putting post-retirement workers at a disadvantage when it comes to income.

Current Retirees Think They’re Better Off Than Their Parents and Children in Retirement

Particularly concerning is current retirees’ perception of their comfort during retirement compared to older and younger generations. By all accounts, current retirees are not faring well: They’re worried they’ll outlive their savings, heavily rely on uncertain social security, and continuously accumulate more debt. Yet many are confident that both older and younger generations were and will be less comfortable in retirement than they are.

Despite financial regrets during their working years, 42% of retirees believe their retirement is and will continue to be more comfortable than their parents’ retirement was.

That’s not particularly surprising, considering the silent and boomer generations tended to be more wealthy throughout their lives than their parents’ generations.[13]

Retirees (60% agree or are neutral) also think they’re better off than their children will be when they reach retirement age. Their belief that younger generations will struggle more during retirement is congruent with reports that millennials are the first generation to be less financially secure than their parents, largely due to stagnant wages and inflation — particularly when it comes to education and housing costs.[14]Median wages, for example, grew three times faster between the mid-1980s and mid-1990s than they did between 2007 and 2017.[15][16]

Non-retired respondents, however, reported retirement saving rates similar to those that experts suggest. Their saving for their future may result in a more comfortable retirement than would otherwise be expected.

Key Takeaways

The pandemic has hit retirees harder for a number of reasons, including the impact of the virus on older adults. The health care costs associated with potential long-term effects of the virus could put even more financial stress on retirees, who are already struggling to make ends meet.

Nearly 1 in 10 retirees has been forced back into the workforce as a result of the pandemic, but a substantial proportion has to work part time during retirement to cover costs, regardless of the ongoing recession. In fact, nearly half of retired respondents who have some form of employment do so because their retirement funds and social security income aren’t cutting it.

The good news seems to be that younger Americans are doing a better job of saving for retirement: The average non-retired respondent said they’re saving about 10% of their income for retirement, and other sources suggest that younger generations began saving earlier than those who are currently retired.[10] Current workers, then, might have more comfortable retirements to look forward to than previous generations of retirees. That, of course, somewhat depends on the longevity of social security, which makes up approximately 60% of current retirees’ income.[1]

Overall, retirees’ financial struggles are concerning, as people are living longer and have more expenses throughout their retirement years.


We surveyed a total of 1,500 Americans in two surveys on October 30, 2020, and November 24, 2020.

Each respondent answered up to 20 questions related to their financial situation, retirement preparations, and worries surrounding retirement and financial planning.

More Research From Clever

Article Sources

[1] Center for Retirement Research – "Wealth of Typical Household with Head Age 55-64".
[2] National Council on Aging – "Scope of Financial Insecurity in Retirement". Pages 2.
[4] Social Security Administration – "2020 Fact Sheet".
[5] Bureau of Labor Statistics – "Annual Expenditures by Occupation".
[6] Federal Reserve – "Survey of Consumer Finances".
[8] National Council on Aging – "Scope of Financial Insecurity in Retirement".
[11] Center for Retirement Research – "Employer Perceptions of Older Workers". Pages 21.
[12] Center for Retirement Research – "What Jobs do Employers Want Older Workers to Do". Pages 9.
[16] Pew Research Center – "Real Wages Haven't Budged for Decades".

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