Savings in your 60s: What's the reality? A thorough explanation of the truth about retirement funds and the amount you really need, which will surprise even the youth

Tama-chan and GG Yumeta's witty talk!! [Economy]

GG Yumeta:Oh, Tama-chan, what are you reading with such a serious face?

Tama-chan:GG Yumeta! Look, look at this! It says 'Savings at 60: Hope vs. Reality'! Hey, GG Yumeta, do you really need that much money for retirement?

Want to know about money in your 60s?

GG Yumeta:Oh, are you worried about the future too, Tama-chan? I'm impressed. Well, in these kinds of stories, the average and the reality are so far apart that it's almost funny.

Tama-chan:Eh, is that so? It seems like there's quite a bit on average, though...

GG Yumeta:Yes, yes, the average value is pulled up significantly by a few wealthy people. For example, if there's one kid in your class who got 100 on a test, even if everyone else got 30, the average score would still be decent, right?

Tama-chan:Ah! I see! So, what's the real story?

GG Yumeta:Heh heh, that's where the median comes in. You can think of it as the score of the kid in the middle of the class. Looking at that, for single people it's 3 million yen, and for two or more people it's 7 million yen. How about that? Compared to the average I mentioned earlier, it feels a bit different, doesn't it?

Tama-chan:Wow! You're right! That seems kind of low...

How much money do you actually need for retirement?

GG Yumeta:Right? It's no wonder a young person would think 'that's low.' Now, as for the crucial question of 'how much do you need?', that really depends on what kind of princess life you want to live in the future, Tama-chan.

Tama-chan:Princess life!?

GG Yumeta:Exactly. Whether you live modestly or travel the world. But, as a rough guide, it's said that a couple needs about 20 to 30 million yen. If you live alone, you can get by with a little less, though.

Tama-chan:Ehh! That much!? I wonder if a school teacher's salary can cover that much...

GG Yumeta:Hahaha! You say the funniest things, Tama-chan! But there's public pension, and the idea is to supplement what that doesn't cover with your savings. Also, if you get sick or need nursing care, that costs more money, and if your house gets old, you'll need repairs, right?

Tama-chan:Wow, that's tough...

Why young people think it's 'low'

GG Yumeta:And so, I think there are a few reasons why you feel it's 'low', Tama-chan.

Tama-chan:Yeah, yeah!

GG Yumeta:First of all, everyone is worried about whether they will actually receive a pension in the future. Also, prices keep rising, so money today might not have the same value in the future. Besides, smart kids like you, Tama-chan, look at information online and end up thinking about all sorts of things, right?

Tama-chan:That's right! GG Yumeta, are you doing anything for your retirement?

GG Yumeta:Haha, that's top secret! But you know, Tama-chan, since you're still young, it's a good thing to start thinking about it, even if it's just a little bit at a time. Planning is important in life!

Tama-chan:Hmm, it's difficult, but I think I kind of understand! Thank you, GG!

GG Yumeta:You're welcome. GG Yumeta is rooting for you to become a wonderful princess in the future, Tama-chan!

The amount of savings at age 60 is a topic that many people are interested in. Let's take a detailed look at the gap between expectations and reality, as well as the funds needed for retirement, based on the latest survey results.

Savings at Age 60: Expectations vs. Reality

According to the "Public Opinion Survey on Household Financial Behavior (2022)" by the Central Council for Financial Services Information, savings for those in their 60s are as follows.

[Including households with no financial assets]

Household Type | Average Savings | Median Savings
Single-person household | 13.88 million yen | 3 million yen
Households with two or more people | 18.19 million yen | 7 million yen

Looking at these results, the average values appear high, at over 10 million yen for single-person households and over 18 million yen for households with two or more people. However, since averages tend to be pulled up by a few high-saving households, the "median" is said to be closer to the actual situation. Looking at the median, it is 3 million yen for single-person households and 7 million yen for households with two or more people, which is significantly lower than the average.

It is understandable that some young people might feel that this median is "low...".

How much money is needed for retirement?

The funds required for retirement vary greatly depending on individual lifestyles and household composition. However, general guidelines are as follows.

For a married couple

Regarding retirement funds for a married couple, there are various estimates, but the view that 20 million to 30 million yen is necessary is common.

• Average living expenses: The average consumption expenditure for elderly couple households is considered to be about 235,000 yen per month.

• Difference from pension income: In many cases, public pensions alone are insufficient to cover living expenses, and the shortfall must be covered by savings. For example, assuming a deficit of several tens of thousands of yen per month, a deficit of nearly 20 million yen would occur over 20 to 30 years.

• Home ownership: In the case of renting, rent expenses have a significant impact. There are also estimates that even more funds (around 70 million yen) are needed if renting in a city.

For those living alone

For those living alone, a certain amount of funds is also necessary to maintain an average lifestyle in retirement.

• Average living expenses: The average monthly expenditure for a single unemployed household aged 65 or older is approximately 155,000 yen.

• Difference from pension income: Comparing income and expenditure, there is often a deficit of about 20,000 to 40,000 yen per month, and it is estimated that approximately 7.4 million to 15 million yen will be needed over 30 years.

Other expenses to consider

• Medical and nursing care expenses: If illness or nursing care becomes necessary, additional costs will be incurred. Nursing care costs average several million yen, and funeral expenses may also be required separately.

• Housing costs: Even if you own your home, there are repair costs and property taxes. For those renting, rent is a significant burden.

• A comfortable life: To enjoy a richer retirement, such as through travel and hobbies, more funds will be needed in addition to the amounts mentioned above.

The background behind why young people feel it is "not enough"

The following reasons may explain why young people feel that the median savings amount for those in their 60s is "not enough."

• Anxiety about pensions: There is a growing awareness that it will be difficult to live on a pension alone in the future, and there is a strong sense of the need for self-help asset formation.

• Concerns about rising prices: Considering that future prices will be higher than they are now, people feel that current savings are insufficient.

• Access to information: Information about retirement funds is overflowing on social media and in the media, making it easy to feel a sense of crisis.

• Gap with one's own ideals: People feel a discrepancy between the funds they believe are necessary for the retirement life they envision and the reality of their actual savings.

Summary

Since there is a large difference between the average and median savings at age 60, it is important to understand the reality by referring to the median. The amount required for retirement funds varies depending on lifestyle and pension income, but a general guideline is 20 million to 30 million yen for a couple and 7 million to 15 million yen for a single person.

It is no wonder that the younger generation feels it is "not enough," and to dispel future anxieties, planned asset formation from a young age is becoming increasingly important.

▼ Likes, comments, follows, and shares are all welcome! I appreciate your support! 😂