Meet the ‘silver squatters’: Frustrated seniors in their 50s who aren’t ready to retire

“I know I’m not going to be able to retire at 65 unless I win the lottery,” Thomas told Business Insider. “I expect that I will need help from my daughter when I am no longer able to work, or I will need more government assistance than Social Security.”

He is not alone. Thomas is one of what retirement experts call “silver squatters” — seniors in their 50s who are less prepared than other boomers, even though they’re nearly a decade away from retirement. “Squatters” refers to the possibility that many will have to rely on families for shelter in later years.

As far as silver squatters go, Thomas’ story is all too familiar. According to research by Prudential Financial, the median retirement income for those in their 50s is less than $48,000, while 35% of 55-year-olds have saved less than $10,000 and 18% have save nothing at all in 2023.

Two-thirds of 55-year-olds say they fear outliving their savings. That’s the highest level of fear among any group in Prudential’s 2024 survey, with 59% of 65-year-olds saying they’re worried they’ll outlive their savings.

“In general, they’re not as prepared as the boomers and they’re actually doing better than the millennials,” Pete Welch, managing director of pensions and wealth at Inspira Financial, told BI, though he noted that Younger Gen Xers still have it. time to save their money.

The lack of preparation among the group can be attributed to modern planning and the unique economic conditions of the majority of the 50s, in addition to the limited financial knowledge among the generation, wealth advisers say.

René, a 50-year-old living in Austin, Texas, is worried about whether she and her husband will have enough to live comfortably once they retire. Their life savings — about $380,000 between the two of them — dwindled to nothing after a medical diagnosis put him out of work and through a series of surgeries over a two-year period, he told BI .

The couple, who are behind on some of their debts, do not know if they will be able to get more financial help once they retire, apart from the pension payments they were expecting. They have no family outside, and they don’t want to depend on their daughter for help.

“I was like, oh my God, how did we get here?” René said so, explaining the appeal he made with their mortgage provider not to plan their house. “We’re going to have to work with 401k-it, and that’s how it’s going to have to be now.”

The forgotten generation

Silver squatters have similar characteristics, despite the unique circumstances surrounding retirement readiness. This group of Gen Xers – the generation of Americans aged 43 to 59 – expects to delay or work beyond their retirement years. 47% of Gen Xers think they will have to retire later than they originally expected, while 40% expect to work for a while after they retire, according to Prudential research.

Most also do not expect to receive any inheritance, regardless of whether those who came before them held billions in wealth. Only 12% of the 55-year-old group expects to receive money from their family members, Prudential research has found.

However, they mostly expect to rely on family for support once they retire. About 24% of 55-year-olds say they expect financial support from their family members, and 21% add that they need housing support, the report said.

That compares to just 12% of 65-year-olds who say they will need that kind of help from home.

The retirement readiness gap may be due to the “unique” challenges of Gen Xers, according to Dylan Tyson, head of retirement strategies at Prudential. He notes that the entire generation was in their prime working years during the 2008 financial crisis, which could have set them back financially.

Gen Xers may be at a critical point in life, where many surprising expenses have arisen to reduce their savings. Consider those who had to support their children’s college education or pay for housing for their parents, said Inspira’s Welch.

“You try to help here, you try to help there, and at the end of the day, there’s not enough on the table to think about what you’re going to do for yourself,” Welch said, adding that some of Inspira’s Gen X customers expressed frustration about their financial responsibilities to their families. “They’re in a very, very difficult place that, for whatever reason, I think the boomers probably didn’t have to deal with.”

Low rates of financial literacy — which is common among every generation in the US, according to a survey from the World Economic Forum — isn’t helping the situation, Welch and Tyson say. About half of Gen Xers save without a comprehensive retirement plan, Prudential found.

Most also don’t seem to account for major expenses during retirement, with 48% not accounting for health care costs and 75% not including living expenses.

Many Prudential clients don’t even know how much they need to save, Tyson said, adding that many of the firm’s Gen X clients only think about how long they will live. He said he believes many of them think wrongly because of the increasing life expectancy in the United States.

“If you don’t have a cushion — again, this is the group we’re talking about, the 60-year-old, uninsured — they really need to watch every dollar and think about that,” Welch said. said.