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It is the refrain heard your entire adult life: Save, save, save for retirement! And for good reason. It takes most people their entire career to build up a big enough nest egg to live off of after exiting the workforce. With Americans living much longer and still retiring at about the same age as decades ago, today’s workers must squirrel away more money than ever before.

Life expectancy has been on an upward trajectory since the 1970s. The U.S. population on average is living nearly a decade longer than it was 50 years ago.  While today’s average life expectancy is 78 years old, many seniors are living well into their 80s and 90s.

Conversely, average retirement age has remained relatively flat, with most Americans calling it quits from the labor market in their mid-60s. Even though longevity has gone way up, the ability for seniors to add to their employment years has lagged. Seniors are often pushed out of the labor market well before they can comfortably retire. Ageism, lack of technological skills, health issues, and extended family needs have all played a role.

What does this mean for the senior population right now? Many are finding a hefty savings gap between the funds at their disposal and the amount they need for all those years without employment income.

Here are the four big factors driving cash needs for retirees as they age:  


Along with longevity comes an increased need for additional years of high-quality healthcare. The cost of healthcare is increasing precipitously nationwide. For the elderly, doctor’s visits, prescription medicines, nursing care, and surgeries are a few health-related costs taking a big bite out of monthly cash flows. While some healthcare services are covered under Medicare, many medical practices do not accept those plans, leaving seniors to pay out of pocket for the difference.

Cost of living. 

Many retirees need extra support handling daily tasks in their homes, especially as they grow older. Senior citizens often must cover renovation costs to make their homes more accessible and safer to live in. Or they are forced to move to elder-friendly homes, which are in short supply and very high demand. Paying for in-home nursing care gets expensive quickly. If a retiree opts to move to an assisted living facility, big slugs of cash are needed up front to reserve a spot.

Lack of pensions and other retirement benefits.

Gone are the days when most companies offered pensions and other ongoing retirement benefits to career employees. It is becoming increasingly rare for Americans to stay in one profession their entire career, much less with one company in order to obtain future benefits for their tenure. Instead, aside from social security benefits, retirees are left to pay their bills out of their nest egg. Even employer matched retirement contributions, a relatively boilerplate employment perk, are now falling by the wayside. Retirement plan funding is being left solely to the employees themselves.

Adult child needs.

Adult children are having their own set of difficulties finding solid financial footing. Many young adults come calling for help from retired or nearly retired parents to pay bills, putting seniors in a precarious financial position. Do they pull from retirement savings to lend financial support to their kids? If so, how much, how often, and for how long? At what point does extended family support create the potential for big, long term financial troubles? Parents usually have a tough time saying no to their kids, regardless of age, putting an even tighter squeeze on the funds at a retiree’s disposal in the coming years.

The retirement savings gap is a very real problem facing the senior population in our country. If you are having trouble figuring out what your financial needs will be in retirement and how to plot your path forward, we are here to help. Don’t hesitate to reach out for a free initial consultation.