Retirement readiness score points to troubling gaps

Employees are reaching retirement age with little preparation of what's to come. 

According to fintech provider IRALOGIX Retirement Readiness Index, the national retirement readiness score is 45.8 out of 100. The index measured retirement preparedness across five key areas, including savings and investments, healthcare readiness, lifestyle and spending, emotional well-being and economic and policy confidence. 

Scores under 50 point to a "moderate risk" zone, according to their data, and should be a "wake up call" for those nearing retirement and the employers and policy makers that have influence on retirement benefits and programs, said Peter de Silva, CEO of IRALOGIX. 

"It's not just a number — it's a mirror held up to the financial anxieties, gaps in planning and uncertainty that millions of Americans face as they approach one of life's most important milestones: retirement," de Silva said in a press release. "Our data shows that too few are prepared for both the financial and personal impact of aging-related issues, and are struggling with saving enough, planning for healthcare, and trusting that essential benefits like Social Security will be there when they need them." 

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To create a full retirement score, IRALOGIX assigned each key area a maximum number of points that it could potentially contribute to the total retirement readiness score. Savings and investments, for example, have the biggest influence on a person's retirement readiness, and IRALOGIX assigned this area a maximum of 35 points toward the total score. However, Americans scored just 15.1 points in this area, meaning the majority of savers are not saving enough for the long-term, and lack confidence to boost their savings. 

Another category was healthcare readiness, which was given a maximum of 15 points. Yet Americans across the board scored just 6.3 points in this area. Inadequate healthcare preparation is a widespread problem for employees approaching retirement, and one that will only become more dire, with cuts to Medicare expected in the coming years and healthcare costs on the ride. According to IRALOGIX data from 2024, 37% of retirees said healthcare costs were their biggest challenge. 

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"Retirement readiness is not just a personal issue, it's a societal one," de Silva said. "When individuals are unprepared for retirement, the ripple effects are felt across families, workplaces, communities, and the broader economy." 

Yet there were some bright spots in their survey: Americans scored higher — though still below average — in areas of economic and policy changes, as well as emotional well-being. IRALOGIX found that half of the respondents expect Social Security to remain intact, and there is wide-spread concern around the impact of inflation on retirement savings. 

"The good news is that retirement readiness isn't out of reach, but it does require action," Pete Littlejohn, president of IRALOGIX, said in the release. "Americans can start by getting informed, setting clear goals, and using the tools available to them, from workplace retirement plans to personal savings and trusted financial advice." 

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As employees look for support and solutions from employers, it will require a multi-pronged approach to ensuring employees are financially prepared today and into the future. Offering retirement plans with autoenrollment options, as well as access to financial wellness programs with personal advisory services, are critical steps for employees to get on the right track as soon as possible.  

"Preparation is power," Littlejohn said. "Every step taken today helps build the confidence and security needed for tomorrow."