The Economics of Aging: Statistics on Retirement Savings and Spending

Retirement is a milestone filled with opportunities—but it also raises the critical question: Are you financially prepared? Expenses like housing, healthcare, and daily living can quickly deplete retirement funds. 

For example: 

• Housing costs account for 33.3% of retirees’ budgets, making it their largest single expense.
• ​​Despite careful budgeting, 31% of retirees report spending more than they can afford on expenses.
• Only 54.4% of American families had retirement savings accounts in 2022, meaning nearly half were without one. 

In this article, we’ll dive into retirement savings and spending statistics to help you refine your strategy. Equipped with this knowledge, you’ll be better prepared to navigate saving for retirement.  

Retirement Basics 

Retirement raises many questions, but understanding the basics provides a strong foundation for planning. These figures shed light on the realities and challenges of saving for retirement: 

• The average retirement age in the United States is 65 for men and 63 for women. 
• Social Security provides an average monthly benefit of $1,976 as of January 2025 and is estimated to replace only about 40% of annual pre-retirement income. 
• 71% of non-retired Americans don’t expect to have enough money saved for retirement, and 42% are very concerned about their ability to fund retirement. 

Retirement Savings Statistics: How Do You Compare?

How much are people saving for retirement? The answer depends on who you ask. Age, gender, and marital status all play a role in shaping retirement savings. Let’s look at the numbers. 

Retirement Savings by Age

• Many financial advisors suggest needing around 80% of pre-retirement income for a comfortable retirement supported by Social Security, savings, and investments.
• According to a Federal Reserve survey, retirement savings peak at a median of $200,000 for those aged 65–74, then drop to $130,000 for those 75 and older, likely due to withdrawals and rising expenses.

• The same survey shows the most significant increase in savings from ages 35-44 to 45-54 and 45-54 to 55-64, with a median increase of $70,000 between each of the two ranges.

• 70% of retirees wish they had started saving more and earlier for retirement, according to a 2024 study
• Baby boomers (58.1%), men (47.8%), non-Hispanic white (53.6%), and non-hispanic Asian individuals (46.8%) are the groups most likely to hold retirement savings accounts. 

The Impact of Gender, Marital Status, and Parenthood

Retirement savings aren’t equal across the board—gender, marital status, and whether you have children can play a role.

• Women are more likely than men to have no personal retirement savings, with 50.2% of women lacking savings compared to 46.8% of men.
• Men are more likely to have $100,000 or more saved (29.6%) versus women (22.1%). 
• In 2022, women earned only 82% of what men earned for similar jobs in the U.S. 

• 82% of married individuals in a recent survey have personal savings plans for retirement, compared to just 50% of unmarried individuals—a 32-point gap underscoring the impact of marital status on saving for retirement.
• Married individuals are more financially prepared for retirement: 39.1% of those married once have $100,000 or more in savings, compared to just 18.1% of those who never married.

• 36.2% of adults with children have no retirement savings, compared to 41.5% of those without children.

Retirement Savings Expectations vs. Reality

Ideas about how much money is “enough” for retirement often shift once people retire. According to a 2024 EBRI survey: 

• Nearly half (49%) of workers think they’ll need more than $1 million to retire comfortably.
• 21% of workers believe they’ll need $2 million or more, but only 12% of retired people feel the same.
• One-third (33%) of those already retired say they need less than $500,000 to cover their expenses, showing that retirement spending often looks different than expected.

These findings highlight how retirement expectations can change once people start living in retirement.

Types of Retirement Savings Accounts 

Here are key statistics about the types of retirement accounts people have:

• Tax-preferred accounts, like 401(k)s, IRAs, and Roth IRAs, are held by 60% of adults, with non-retirees more likely to have these accounts than retirees by a margin of 4%.
• 29% of adults have employer-sponsored pensions, however, these are much more common for retirees than non-retirees.
• A majority of adults (67%) have at least one tax-preferred retirement account or a pension.

Retirement Savings and Access Across Racial Groups

Retirement savings and access to employer-sponsored plans vary across racial and ethnic groups. 

• Among households with retirement savings, median account balances highlight disparities: White households have $100,000, Hispanic households have $45,000, and Black households have $39,000.
• Households with a white head of house were 1.5 times more likely to own at least one retirement account than those with a black head of house, in a 2021 Census study.
• Hispanic workers have the least access to employer-sponsored retirement savings plans (54.9% have no access), followed by black workers (36.4%). White workers have the most access (31.5% lack access). 

Challenges in Retirement Savings

Saving for retirement comes with growing challenges, from debt to longer life spans, reflected in these statistics: 

• 36% of the U.S. workforce—59 million people—are independent workers, often without access to employer-sponsored retirement plans.
• 62.1% of households led by individuals aged 65+ carry debt, with a median of $34,000.
• Average life expectancy across the world is projected to rise from 73.6 years in 2022 to 78.1 years by 2050, adding pressure on retirement savings to last longer. 

Understanding how much people save for retirement is only part of the picture. To truly grasp the financial realities of retirement, it’s essential to look at how those savings are spent—covering everything from housing and healthcare to leisure and travel.

Retirement Spending Statistics: Where Does the Money Go?

Retirement spending varies widely based on lifestyle, location, and individual needs. However, key statistics provide insights into how retirees typically allocate their budgets. Let’s break down the numbers.

• Households led by individuals aged 65 and older spent an average of $57,818 in 2022, which is $20,000 less than the annual spending of households headed by those under 65.
• Most retirees (79%) follow a monthly spending plan, with nearly half of lower-income retirees (48%) sticking to their plan closely. Only a small percentage (8%) do not follow a plan. 
• Spending decreases significantly with age: Retirees aged 65+ spend 26% less annually than those aged 55–64.
• 29% of retirees say their spending is higher than they can afford.
• Most retirees spend less than $4,000 per month (81%), with 3% spending $7,000 or more monthly. 

Retirement Spending by Category 

Retirees allocate their budgets across a range of expenses.  Here’s how spending breaks down based on Bureau of Labor Statistics data.

• The largest expense for retirees is housing costs, with an average of $20,362 annually, making up 35.2% of spending.
• Transportation costs total $8,172 annually, accounting for 14.1% of spending, including car payments, insurance, and fuel.
• Food rounds out the top three spending categories at 12.6% of annual spend ($7,306), while entertainment is one of a couple categories bringing in the rear, averaging $2,672, 4.6% of annual spend.

Increasing Healthcare Spending in Retirement 

Healthcare is a big expense in many household budgets, increasing with age and in retirement. Here are some statistics to consider: 

• Spending on Medicare monthly premiums was $174.70 in 2024, increasing from $164.90 in 2023. 

• More than 70% of people who live past age 65 will need some long-term care due to health or aging. 

• The median cost of assisted living in the U.S. is estimated at $5,511 per month as of 2024, although it varies by geographic location and type of room or apartment. 

• A couple retiring in 2021 would have needed $296,000 in savings for a 90% chance of covering health care expenses, including median drug costs, throughout retirement.

Challenges in Retirement Spending 

• The cost of living increase has averaged 2.5% annually between 1975 and 2024 and can significantly impact retirees’ spending power over time.
• 2022 saw the largest Social Security cost-of-living adjustments since 1981, at 8.7%.

• Approximately 36% of retirees have faced unexpected costs since retiring, but only 59% have at least three months of funds saved for emergencies. 

• Nearly half of adults aged 60 and older have household incomes that put them falling short of the income needed to cover basic living expenses.

To Sum It Up 

As more than 4.1 million Americans prepare to turn 65 in 2025, the need for thoughtful retirement planning has never been greater. With the right preparation and income strategies, you can set yourself up for a secure and enjoyable retirement.