[Financial Hardship] Why do 50% of seniors feel that "life is difficult"? A thorough explanation of the actual savings situation for those in their 70s

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

GG Yume-ta and Tama-chan's savings situation - The reality for those in their 70s

GG Yume-ta:Whoa, Tama-chan, what's wrong? You suddenly have such a serious look on your face.

Tama-chan:Hey, GG. I've been hearing on the news lately that "over 50% of elderly people are struggling financially." Is that true?

GG Yume-ta:Yeah, that topic. Unfortunately, as surprising as it may seem, it's true. I suppose many people feel that their pension alone isn't enough.

Tama-chan:Oh, really...? But isn't everyone saving money? I heard on TV the other day that "the average savings for people in their 70s is about 19 million yen"! That's amazing, right!

GG Yume-ta:Haha, Tama-chan, you've noticed a good point. But that's a magic number.

Tama-chan:Magic? What do you mean?

GG Yume-ta:Well, for example, suppose there is one very rich kid in a class who has 100 million yen. Even if everyone else in the class only has 100 yen, the average for the whole class would be quite high, right? It's the same thing; a very small number of wealthy people are pulling the average up significantly.

Tama-chan:I see! So that average isn't reliable.

GG Yume-ta:Exactly! That's where a more important number comes in. That is **"median"**.

Tama-chan:Median? It sounds like a math class...

GG Yume-ta:Well, well, just listen. The median is the savings amount of the person who falls exactly in the middle when you line up everyone's savings from smallest to largest. According to a survey by the Financial Services Agency, the median savings for households of two or more people in their 70s like us is 8 million yen.

Tama-chan:Wow, that's totally different from the average! This is much more realistic.

GG Yume-ta:Smart Tama-chan, that's right! So, when you hear "average of XX million yen" on TV, remember to think, "Oh, I need to check the median that GG taught me." Comparing your own savings to this median is the easiest way to understand whether you have a lot or a little.

Tama-chan:Yeah, I got it! But tell me, GG, do you have a lot of savings? Or a little?

GG Yume-ta:Heh heh heh. That's... a secret. But I have enough to buy the ice cream you like every day, I suppose!

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[Details] What is the savings situation for those in their 70s? The reality of the "20 million yen retirement problem" seen through averages and medians

Survey results show that many seniors feel life is difficult. According to data such as the Ministry of Health, Labour and Welfare's "Comprehensive Survey of Living Conditions," over 50% of elderly households responded that their lives are "very difficult" or "somewhat difficult." This seems to be against a backdrop where many households feel that their pension income alone is insufficient to cover living expenses due to factors such as rising prices.

The "Average Savings" and "Median" for those in their 70s

A characteristic of the savings situation for those in their 70s is that there is a large disparity between households. Because a small number of wealthy households tend to pull up the average, the "median" is closer to the reality of most households than the "average savings amount."

According to the Central Council for Financial Services Information's "Public Opinion Survey on Household Financial Behavior (2022)," the savings amounts for those in their 70s are as follows.

• Two-or-more-person households

  • Average savings: Approx. 19.23 million yen

  • Median: Approx. 8 million yen

• Single-person households

  • Average savings: Approx. 16.34 million yen

  • Median: Approx. 4.75 million yen

*Please note that these figures fluctuate depending on the survey year, so treat them only as a guideline.

Are my household's savings high or low?

When determining whether your own savings are high or low, it is a good idea to consider the following points.

1. Comparison with the "median": First, compare your household's savings with the median. If it is higher than the median, you can say that you have more savings than many in your generation.

2. Comparison with retirement living expenses: Whether your savings are sufficient also depends on the money required for your future life. According to the Ministry of Internal Affairs and Communications' Family Income and Expenditure Survey, the average consumption expenditure for a jobless elderly couple household aged 65 or older is approximately 240,000 yen. However, to live a comfortable life with hobbies and travel, more expenditure than that is required. Compare this with your own pension income, calculate the amount that will likely be short each month, and check how many years your savings will last.

3. Preparation for emergencies: It is also important to prepare for unexpected large expenses such as illness or long-term care. You need to judge whether your savings are sufficient after taking into account long-term care costs and medical expenses.

It is important not to be swayed by the savings amount alone, but to make a calm judgment based on your own lifestyle and future plans.