According to the 2023 Northwestern Mutual Planning & Progress study, Americans report having less than $90,000 on average in retirement savings.1 Individual retirement accounts (IRAs) and 401(k) savings plans strive to compensate for the lack of traditional pension plans, however, many Americans have not been able to take advantage of these or cannot afford to save enough for retirement.2


  • Leaving the workplace at age 65 may mean funding over 20 years of retirement.
  • Retirees often scale back their lifestyle or downsize to supplement retirement.
  • Those without adequate retirement funds may need to continue to work past retirement age.

Funding Retirement

Retirement means the end of a steady income, which is why having a nest egg is important. Some financial experts say retirees need up to 80% of their pre-retirement income once they stop working.3 An annual income of $100,000 means $80,000 will be needed each year to maintain an individual’s lifestyle. Without savings or a pension plan, retirees need to either continue earning money or cut back on their spending.

For those who enter retirement without saved cash, their only source of income is commonly Social Security. Most individuals aged 65 and older receive the majority of their income from Social Security and without the benefits, 38.7% of these adults may fall below the official poverty line.4

Historically, many workers relied on corporate pension plans to fund their retirements but those plans have decreased in the past decades.5 Some government jobs still have pensions, however, those jobs may not have had Social Security taxes withheld, and decrease the retiree’s Social Security benefit.6

Relying on Social Security

With the average monthly Social Security retirement benefit check at $1,907 in 2024, it can be a big shock to those who earned more while working.7 On average, Social Security replaces just 40% of a retiree’s pre-retirement earnings.8 Although there are ways to maximize it, Social Security still functions best as an adjunct to personal savings.

When considering healthcare costs like Medicare premiums, food and housing, personal debt, and other financial obligations many retirees carry, it’s clear why living solely on Social Security may not work.


Without savings, it will be difficult to maintain the same lifestyle an individual had in working years. Some retirees make adjustments by:

  • Moving into a smaller home or apartment
  • Reducing television or streaming services
  • Cancelling gym memberships
  • Driving a less expensive car

Continue to Work

To keep up with basic expenses in retirement, many need an extra income stream. This could mean going back to work or getting a part-time job. The Internet makes it easier than ever for retirees to work remotely. According to AARP, retirees who work part-time, freelance, or do consulting work tend to increase their retirement satisfaction by providing a sense of purpose and community.

How Can Individuals Save More Toward Retirement?

How and where workers save can be as important as how much they save. Financial vehicles behave differently and are taxed differently so exploring diversification can help minimize the impact of taxes, market volatility, and inflation.1

What Is the Average Retirement Age in the United States?

In 2023, the average age for men to retire was 65 and the average age for women to retire was 63.11

The Bottom Line

Retiring without savings requires sacrifices and strategies. Social Security may not provide enough money for most people to maintain their pre-retirement lifestyles. For some, downsizing or working part-time can provide a supplement to Social Security. source