The Retirement Problem in America

Posted by Bethany Wood on Mon, Jan 13, 2020
Bethany Wood

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The statistics surrounding the dire state of retirement in America are abundant. According to a 2019 Bankrate Financial Security Index survey, 21% of Americans aren’t saving any money at all. Forty eight percent of working adults are saving something, but still less than 10% of their annual income.1 In a podcast by BreakingBanks, host JP Nicols, Penny Crossman, Editor at Large for American Banker, and Rhian Horgan, CEO and Founder of Kindur, a fintech company focused on retirement savings and advising, discuss what’s causing the retirement crisis for the retirement-aged generation and what banks can do to help.

There’s no simple solution for people who are older to start saving for retirement. However, we likely all know people who have no savings. It’s one thing to cite statistics, but it’s completely different when we’re connected to the situation—when our family, friends, or even ourselves are the ones who will be suffering. In 2018, The Vanguard Group investment company reported the median account value for investors age 65 and older is only $58,035.2 If your retirement lasts 20 years, that’s only $3,000 per month.

From Horgan’s experience, she noticed that, specifically for older generations, conversations about retirement were typically centered around “when I retire.” It’s usually closer--too close-- to retirement age when the conversations shift to how to retire. Of course, when and how are two different things. Americans typically follow an embedded assumption that “retirement age” is 65. Something we’re seeing more of lately is that the age of the “magic number” is gone. Many people are phasing into retirement by switching to part-time or finding a niche in the “gig-economy” such as driving for Uber or being an AirBNB host.

For the baby boomer generation, the number one retirement fear is running out of money and the number two fear is not being able to pay for medical expenses. The average retired couple spends 280k of their retirement savings on healthcare. If you live in a nursing home, that’s an additional 100k per year.4 Many consumers find these numbers surprising, as most people separate health issues from financial issues, but for retirees, it’s very much a financial issue. Horgan suggests that banks can help by pushing the awareness of this issue with customers.

These experts also suggest banks can help by providing more readily available education and advice for those who may lack in understanding. Everybody will have to stop working at some point and will need at least a little bit of money to draw from. Furthermore, there are many social issues with those lacking in retirement. Many are unbanked, uneducated, or feel like they’re on their own when it comes to figuring all this out. Some fintech companies are working to tackle these issues, such as Horgan’s Kindur, whose program is specifically designed for (though not limited to) the baby boomer generation or Finhabits, that seeks to help minority groups and those who are unbanked and underbanked get educated and start small to save for retirement.

A partnership with fintech companies like these would be a huge asset to the retirement crisis. While there are many economic factors that may have attributed to this retirement crisis, there are strides being made to fix these problems and prevent the same crisis in future generations.


  4. Nicols, JP, host. “Solving Americas Retirement Problem.” BreakingBanks. 8 Aug. 2019. Retrieved from

Topics: Banking

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