Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • September 2015
09

Three in five US workers may not be able to retire at 65

Open-access content Wednesday 2nd September 2015 — updated 5.50pm, Wednesday 29th April 2020

Three in five workers in the US may not be saving enough to retire at the age of 65, according to a report by Aon Hewitt.

2

Based on an analysis of 77 large US employers, representing 2.1 million workers, the report found 68 to be the median age when workers in the US would be able to retire with enough resources to maintain their standard of living. Some 16% of workers were expected to be unable to retire by age 75.

The report, which examines retirement income adequacy, said most workers were not saving enough to retire at 65 and only 22% were "on the track" to meet or exceed their needs at 65. 

An additional 19% would be close to having "reasonably adequate" savings if they adjusted their lifestyle. The majority (59%) would be unable to afford to retire at 65.

Aon Hewitt said the average employee would need to save around 11 times their final salary at 65 to keep their pre-retirement standard of leaving. But the exact figure would depend on the unique situation of each worker such as age and income.

It said that on average workers needed to add 17% of each year's pay to their retirement fund from age 25 to 65 in order to accumulate adequate income. If employees had less saved, or started saving later than age 25, they would need to contribute more to make up the shortfall. 

For example, based on a typical employer contribution of about 5% of pay and an employee contribution of 12%, for every five years of saving delayed after age 25, an additional 4% to 5% of contribution per year is needed. 

Rob Reiskytl, partner at Aon Hewitt, said: "The benefits landscape has changed over time and US workers are now accountable for a greater portion of their financial needs in retirement.

"Unfortunately, most are underprepared. The most important thing they can do is to establish goals for the kind of retirement they want and determine a savings plan to meet those needs and desires. This might mean starting to save more now, delaying retirement by a few years, or making a conscious choice to retire with a lower living standard."

This article appeared in our September 2015 issue of The Actuary.
Click here to view this issue
Filed in:
09
Topics:
Global

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ