How much do seniors need to save to have a comfortable retirement?

When it comes to budgeting for retirement, Social Security benefits play a pivotal role. These benefits are designed to supplement other sources of income, such as pensions and personal savings. For many retirees, Social Security represents a significant portion of their overall income. A 2015 study by the Center on Budget and Policy Priorities found that for 2 in 5 retirees, it provided at least 50 percent of their income, while for 1 in 17 it was 90%.

If the funds were enough to live a comfortable retirement then this would be okay. However, as James Brumley at The Motley Fool notes, the average monthly check of $1,900 translates to approximately $22,800 per year, which is less than a third of the $72,967 estimated by the US Census Bureau to cover basic expenses such as food, clothing, and housing.

Thus careful planning and budgeting is crucial for retirement. A recent survey by Carewell, an online store for senior care, polled 607 Americans aged 60 and above, and found many seniors face significant budgeting challenges and financial fears.

The study in more detail

The survey revealed that over one in four seniors (28%) do not follow a budget during their retirement years. Alarmingly, nearly two in five (38%) are deeply concerned about depleting their savings before the end of their lives, and a staggering 70% do not have a contingency plan in place should this scenario occur.

On average, the surveyed seniors believe they need a substantial $1.1 million to live comfortably for the remainder of their lives.

Financial struggles are evident, with 18% of respondents currently experiencing financial deficits, and 30% having to downsize their homes to regain financial stability. Reflecting on their past decisions, the average age at which these seniors wish they had started saving for retirement was 25 years old.