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Seniors Struggling to Afford Retirement

By October 9, 2014News

afford-retirementInterest.com reports that seniors in almost every state in the U.S. don’t have enough income available to live comfortably in, or afford retirement.

The report, which is based off of a 2013 Census Bureau data, says that households ages 65 and older are living on an average of about $37,847 per year or around 60 percent of the yearly earnings of the 45-64 year olds, which falls below the 70 percent in pre-retirement income that’s usually recommended for those seeking to retire.

Mike Sante, managing editor of Interest.com had this to say, “It’s clearly that, nearly everywhere in the country, older Americans still don’t have the kind of money coming they to for a secure and comfortable retirement.” Financial health of senior households can be measured by dividing the median household income for residents 65 and older by the incomes of 45-64 year olds in each state to come with replacement rates.

Out of each state in the U.S., seniors living in Nevada are the only group that have incomes that can replace more than 70 percent of their peers earnings. Washington D.C. also beats that number with a 74 percent rate of income replacement. Other states that come close include Hawaii, Arizona, Mississippi and Florida.

On the other side of the equation, states like Massachusetts and North Dakota are worse off. They live on less than 50 percent of the income earned by their younger peers. In other high standard of living states, such as Connecticut and New Jersey, seniors sit at a replacement rate just over 50 percent. Many Northeast states have higher living costs, while North Dakota’s disparity of income can be explained to the oil boom that has caused wage growth.

“The bottom line is (seniors) are still out there competing for goods and services with younger Americans who are working,” Sante said.

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