According to a new study released Monday, seniors in about 48 states are living off of a median household income of $35,107; much less than the median income of their younger counterparts (ages 45 to 64).
Mike Sante, site owner of Interest.com, the site which conducted the analysis of 2011 U.S. Census Bureau data, said:
“We found that many senior citizens are significantly underfunded and risk running out of money.”
The report showed that only seniors in Nevada and Hawaii have median annual incomes that meet the savings benchmark that is commonly recommended by financial planners, which is typically that retirees save enough to replace at least 70 percent of their pre-retirement income.
The study also showed that the states of Arizona, Florida and New Mexico came close to the benchmark, but fell just short:
Arizona at 68.1 percent, New Mexico at 66.9 percent and Florida coming in at 66.9 percent as well.
CNN then reported that:
“Massachusetts seniors were the worst off, living on a meager 45 percent of the income of their pre-retirement counterparts, while North Dakota, Rhode Island, New Jersey and New Hampshire rounded out the bottom of the list, all with replacement rates of around 50 percent.”
Below is a representation of retirement income by state:
Even with the majority of people in the 65-plus are group making up the retired group, the percentage of American that continue to work beyond the age of 65 has continued to grow in recent years, contributing to the senior income shortage.
The study conducted by of Interest.com goes on to say:
“Financial planners and other analysts caution that the retirement income a household needs can vary, depending on many factors, including debt and retirement plans.
Some retirees need more than 70% to 80%. Others can get by on less.
But the fact that older Americans are failing to reach this rough benchmark in 48 states, and are actually below the 60% replacement income level in 31 states, paints a stark picture of how older Americans are faring.”
“People who live in a given area are competing with each other for the same goods and services, including housing, cars and groceries,” said Mike Sante
“We found that many senior citizens are significantly underfunded and risk running out of money, especially since people are living longer than they used to and may need to support a two- or three-decade retirement.”
Is the senior income shortage really becoming a problem because of the fact that we are living longer, and because we are competing with the same goods and services? Or is it because of a lack of financial planning?