Most imagine retirement as a time of boundless leisure time, month-long vacations, and worry-free days. But for many retirees in the time of COVID, this is not the reality they face. According to a new study by Clever, many have not been saving enough, putting them in dire straits during the pandemic. Instead of playing tourist, many of these retirees are taking on part-time jobs just to cover living expenses.
The average retiree has just more than $175,000 in retirement savings — only 39% of the savings recommended before removing oneself from the job force. A shocking two-thirds have less than $50,000 in retirement funds.
Many are relying on social security income (SSI) to get by, which may be risky business, as SSI only pays $1,500 per month on average, much less than the typical monthly spending of $3,900.
According to the study, just a third of retirees think they were well-prepared financially for retirement. Most (56%) said they waited too long to start saving for retirement. About 63% said they wish they better-understood savings and investments when they were working.
Half of the retirees said they had to cut back on spending and expenses in order to retire. About a fourth of respondents said they fear outliving their retirement funds, and more than 40% worry about social security ceasing to exist.
Not only are fewer retirees able to travel as they had once dreamed or actually retire, but some are also struggling to pay for necessities such as their rent or mortgage. In fact, the fastest-growing segment of the homeless population are those over 50 years of age. For at least half of these people, this is the first time in their life they have been homeless. This may mean their homelessness has been the result of little to no savings and bad luck — maybe a lost job, a serious illness, or the death of a spouse.
While some communities may be striving to build affordable housing for seniors, these retirees can end up sitting on a waitlist for years. According to findings by The National Investment Center for Seniors Housing and Care, by 2029, about 54% of middle-income seniors won’t be able to pay for senior housing, even after using the proceeds from selling their existing homes quickly.
At the top of their worries is affordable housing — seniors will be looking for long-term rentals at a reasonable rate. Once they find that, they’re likely to stay for years. As a real estate investor, this could be a good market on which to focus for the future.
Source: New Study Finds Retirees Are Struggling to Pay Their Mortgage