Retirement at a Glance

1. IF YOU COULD PUT A PRICE ON IT – For a middle-income, married-couple family with two children, the estimated expense to raise a child from birth through age 17 was $233,610 in 2015, which, adjusted for inflation, is $292,017 today (source: USDA, CPI Inflation Calculator).
2. TECHNOLOGY TRIUMPHS – Market automation, included automated trading, has reduced trading costs for investors by 50% over the past 10 years and resulted in 30% more savings in Americans’ retirement accounts over their lifetimes. Without market automation, an investor earning $70,000 a year would have to work 21⁄2 years longer to reach the sameretirement savings goal (source: Modern Markets Initiative).
3. AGE OF BENCHMARKING – In 2022, 11% of Americans aged 55–59 are retired, 32% of those aged 60-64, 70% of those aged 65-69, and 83% of those aged 70-74 are retired (source: Gallup).
4. THE FIRST FIVE YEARS – A study found that 1⁄2 of retirees were financially unable to maintain the same spending level for the first five years of retirement (excluding “new retiree” expenses like travel) and had to reduce their expenses by 28% by the 6th year of retirement. The 1⁄2 that could afford to maintain a constant spending level for the first 5 years decreasedtheir expenses by only 19% (source: Consumer Financial Protection Bureau).
5. WHO’S CATCHING UP? – While all 401(k) plans (99.8%) allow participants ages 50 and older to make catch-up contributions, only 28.4% of participants ages 50 and older made catch-up contributions (source: Plan Sponsor Council of America).
6. OFF THE TOP – Out-of-pocket healthcare costs in retirement may leave only 75% of Social Security benefits and 88% of total income available for non-medical spending (source: Center for Retirement Research at Boston College).

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MFS, ‘Retirement at a Glance’ Sept 2022