According to the U.S. Census Bureau’s Survey of Income and Program Participation (SIPP) from 2018, many adults nearing retirement age are financially unprepared. The Bureau-administered survey collects data on all household members, including marital history, fertility history, and retirement savings.
The SIPP found that 49% of adults aged 55 to 66 had zero retirement savings in 2017. The survey also found that women are less likely to have retirement savings than men.
Roughly 50% of women aged 55 to 66 had no personal retirement savings, compared to 47% of men in the same age group. At the opposite end of the spectrum, only 22% of women had $100,000 or more saved for retirement compared to 30% of men.
The term “retirement savings” has a SIPP-unique definition. For married couples, retirement savings means the total amount of individual personal savings combined between spouses residing together. Personal retirement savings data is typically used for a person not living with a spouse.
The SIPP found that 65% of men and 58% of women aged 55 to 66 are married. Married couples often combine their retirement savings, making assigning an amount to each individual more challenging.
Of course, when couples combine their retirement savings, it results in more comparable savings between men and women, as 34.2% of married women who combined retirement savings with their spouse had $100,000 or more saved, compared to 36.4% of married men.
The SIPP also found that marital history significantly affects retirement savings. Among those married once, only about 35% had zero retirement savings compared to 60% of those who never married and 40% of those who married more than once.
Further, the SIPP found that 40% of those married only once had over $100,000 saved, compared to only 20% of those who never married and roughly 33% of those who married two or more times.
According to the SIPP, whether a person has children–and, children with multiple partners–also critically impacts retirement savings.
It was determined that 49% of people who have children with multiple partners had zero retirement savings, compared to only 42% of those who have no children and 36% of people who have children with only one partner.
Conversely, people who have children with a single partner are more likely to have more than $100,000 saved compared to people with no children and those who have children with multiple partners.
The SIPP is important as it highlights differences in retirement savings with the added context of family, marital, and fertility history. The survey allows for comparisons between men and women. It also provides information on individual income, employment, government-program participation, and composition.
Advisement from Fidelity, the financial investment firm, can appear intimidating. Fidelity recommends having the equivalent of your annual salary totally saved for retirement by age 30. Three times your salary should be saved by age 40, six times your salary should be saved by age 50, and eight times your salary should be saved by 60.