While some senior housing options can be costly — nursing home care costing upward of $10,000 to $15,000 a month — 25% of Americans admit they don’t know how they will pay their expenses in retirement, a Federal Reserve report suggests.
The report is part of a broader study of the economic well-being of U.S. households and the issues they face, based on responses to a 2013 survey.
Survey results also indicate that 19% of non-retired respondents ages 55 to 64 report having no retirement savings or pension, with almost half of adults not actively thinking about financial planning for retirement.
Roughly 24% of survey respondents admitted they had given only a little thought to financial planning for their retirement and another 25% said they had done no planning at all. Of those who had given at least some thought to retirement planning, one-quarter didn’t know how they would pay their expenses in retirement.
In addition, the report suggests the economic bust affected when Americans retired. The Great Recession pushed back the planned date of retirement for two-fifths of those ages 45 and over who had not yet retired, while 15% of those who had retired since 2008 reported they had done so earlier than planned due to the recession.
Among those ages 55 to 64 who had not yet retired, only 18% plan to follow the traditional retirement model of working full time until a set date and then stop working altogether, while 24% expected to keep working as long as possible, 18% expected to retire and then work a part-time job, and 9% expected to retire and then become self-employed.
These changes in preferences and demographics are likely to impact senior housing operators in the future.
Access the Federal Reserve’s “Report on the Economic Well-Being of U.S. Households in 2013.”
Written by Emily Study