“Silver Squatters”: Nearly 1 in 4 Americans Aged 55 May Need Family Support in Retirement

Empty wallet

A recent survey has unveiled a concerning trend among Americans approaching retirement: nearly one-quarter of those aged 55 and older may soon find themselves relying on financial support from their families, earning the moniker “silver squatters.” This term refers to older adults who move in with their children due to financial necessity, often occupying spaces like basements or spare rooms.

The Growing Financial Insecurity of Pre-Retirees

The 2024 Pulse Of The American Retiree Survey, conducted by Brunswick Group for Prudential, highlights a grim outlook for this demographic. As the wave of baby boomers reaches the traditional retirement age of 65, a significant portion of the younger retirees—those in their mid-50s—are alarmingly underprepared for the financial demands of retirement.

Startling Statistics

Elderly man talking to a psychologist at a mental health, psychology and therapy clinic for session. Psychological therapist with clipboard for counseling checklist with senior male patient in office

The survey’s findings are based on responses from 905 Americans aged 55 and older, gathered between April 26 and May 2, 2024. It reveals that 21% of 55-year-olds anticipate needing housing support from their families as they age, a stark contrast to the 12% of 65-year-olds and 9% of 75-year-olds who reported the same. This suggests a trend toward increasing financial instability as younger generations approach retirement.

Savings Shortfall

One of the most alarming revelations from the survey is the deep savings shortfall among 55-year-olds. With median retirement savings of less than $50,000, these individuals fall significantly short of the recommended savings goal, which is to have eight times one’s annual income saved by retirement. This financial gap poses a severe challenge, especially as two-thirds of respondents in this age group express fears of outliving their savings—higher than both the 65 and 75-year-old groups surveyed.

The Psychological Impact

Beyond the financial strain, there is a considerable mental and emotional toll affecting these pre-retirees. The survey suggests that current 55-year-olds are not only dealing with financial insecurity but also facing a mental and emotional strain that complicates the traditional notions of a midlife crisis. This group is particularly vulnerable as they are poised to be the first modern generation to retire without the full support of Social Security, with trust funds projected to be depleted by 2035. Additionally, unlike previous generations, most do not have access to a defined benefit pension plan.

Preparing for a Shift in Family Dynamics

Elderly couple stress after conflict, sad news or fight in living room of their home. Senior man with woman in retirement on sofa with expression of disappointment, angry or depressed in house

The prospect of becoming a “silver squatter” is not just a financial issue but a familial and societal one. Nearly half of the affected 55-year-olds have yet to discuss their potential need for financial support with their family members, suggesting that many families may be caught off-guard by these needs. This lack of communication could lead to significant stress and adjustment for families unprepared for the financial and emotional responsibilities of supporting an aging parent.

Navigating the Challenges

For families facing the possibility of supporting an aging parent, open communication about financial planning and retirement expectations is crucial. Families should discuss:

  • Housing arrangements: Consider the logistics and financial implications of integrating an aging parent into a household.
  • Budget adjustments: Review and possibly adjust the household budget to accommodate additional expenses.
  • Long-term planning: Explore all options, including government assistance, private savings, and community resources to plan comprehensively for the future.

Conclusion

As America’s demographic landscape shifts, with a significant portion of the population aging into retirement underprepared, the challenges highlighted by the “silver squatter” trend demand urgent attention. Both individuals and policymakers must consider proactive measures to address these emerging economic vulnerabilities to support aging Americans in maintaining their dignity and financial independence.