The rule of thumb for people who are 55 and have another decade of work before reaching the traditional retirement age is to have already socked away about eight times their salary in their retirement accounts. But the median savings of today’s 55-year-olds is just $50,000, far from enough to fund a secure old age, according to a new study.

In fact, only 1 in 5 people who are 55 years old have $447,000 or more saved for retirement, or eight times the average U.S. salary, Prudential Financial’s 2024 Pulse of the American Retiree Survey found. The report jibes with another recent study on Gen X’s retirement readiness, which found half of those surveyed believe it would take a “miracle” for them to be able to retire.

The new findings come as the oldest members of Generation X, or people born between 1965 to 1980, are now entering their pre-retirement years, giving them a short period in which they can shore up their savings before stepping back from work. But many who are already lagging behind those savings milestones may end up unprepared — at least financially — for retirement, given that it would likely be difficult, if not impossible, to build a sizeable nest egg in a just a few years. 

Even so, a Plan B is emerging with the group, with one-quarter of today’s 55-year olds telling Prudential they plan on relying on financial support from family in retirement, and twice as many 65- and 75-year-olds saying the same. About 1 in 5 Gen Xers, so-called “silver squatters,” also expect to need housing support in their old age, Prudential said.

“If you know you are in trouble, you know you need to get money from somewhere,” David Blanchett, head of retirement research at Prudential, told CBS MoneyWatch. “It could be from their parents, if they are still alive, but it could be their kids, too.”

He added, “Maybe parents made a big sacrifice to send their kids to college,” and there may be a sense of financial obligation that will come back around. But at the same time, those expectations could put more economic pressures on younger Americans like Gen Z, born between 1997 to 2012, who may themselves be struggling to buy homes or save for retirement. 

The truth is that workers — and retirement planners — need to be realistic about what’s possible to accomplish in the last decade of one’s career, Blanchett said. For instance, he noted that he often hears from retirement planners that their clients will have to work far beyond 65 to save enough to retire, but that ignores the reality that most people retire years before they had planned, he said. 

“Hard choices”

For instance, an Urban Institute study that tracked workers from their early 50s through at least age 65 found that only 19% retired voluntarily, with the majority having to stop working before they reached retirement age due to layoffs, poor health or other issues that were beyond their control. The typical worker retires three years before they plan to, Blanchett said.

“Planners say, ‘Oh they are behind, they’ll just work til their 70 or 72,’ and it’s like whoa, whoa, people retire before they plan to,” Blanchett said. “If you are already behind, you’ll just be more behind.”

In other words, people who are 55 years old today might only have seven more years of work, not a decade, which puts them under more pressure to figure out how to fund retirement, he noted.

“What can you do over the next seven years to get you into better shape? It will come down to hard choices,” Blanchett said. 

While saving more can help, most workers don’t have a lot of extra money floating around to put into their retirement accounts, he noted. But if a worker ends their career before they had planned, they could get a part-time job or switch to another type of job later in life, with the goal of earning enough to at least pay for their household expenses, which would help them avoid drawing down their retirement savings. 

Secondly, older workers should plan on postponing claiming Social Security for as long as possible, given that the monthly benefit increases each year it is delayed, until one reaches 70 years old. That means the monthly benefit is about more than 75% higher at the age of 70, than if one claims at 62, the earliest age to start receiving the benefit. 

“The key is to save until you are 63 or 64, but try not to claim or access your benefits” for as long as possible, Blanchett said.