A new study by Prudential shows that 67% of 55-year-olds, along with a majority of 65 and 75-year-olds, are severely underprepared for retirement and in danger of becoming "silver squatters." According to Prudential, "Silver Squatters" describes retired-age individuals who need to rely more on family for housing and financial support. 

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CNBC's senior personal finance correspondent, Sharon Epperson, shares that many people struggle and live longer than they might have anticipated, contributing to retirees' financial hardship. "There’s a lot of discussion going on here about longevity and about the impact that it can have on the economy and personal finances, particularly your retirement savings," she said. 

Epperson also noted that many of those who may be veering toward silver squatter status haven't discussed it with their family members. "And their plans may surprise millennials, Gen Z, the younger generation. The survey found that about half the 55-year-olds who expect support in their retirement haven’t discussed it with their family members yet." 

Epperson discussed Prudential’s survey and findings with Prudential’s Vice Chair, Rob Falzon, to better understand the findings. "You don’t necessarily think about that generation who has been providing for their own parents and their own children as then turning around and needing that help," Falzon says of older Americans. 

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Epperson commented that many older Americans are struggling due to inflation, housing prices, and caregiving responsibilities for their parents. But there is still time to turn things around. 

"At 55, they still have a decade," Falzon remarks. "They have time to take actions, to actually change that picture. And I think that if you’re looking for the bright side to this, it’s like making them aware now of what those challenges are can actually lead to actions to address it so they don’t wind up in that silver squatter situation."

Falzon also says it's important to help people understand how much money they will need to feel comfortable in retirement if we want to close the retirement funding gap. 

Other findings from Prudential's survey demonstrate the financial struggles of older generations and why many fear a retirement crisis. About 35% of 55-year-olds say they wouldn't be able to put together $400 within a month if they had an emergency expenditure, compared to 19% of 65-year-olds and 15% of 75-year-olds. 

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Dylan Tyson, President of Retirement Strategies at Prudential, states, "America's 55-year-olds have the opportunity to re-imagine and protect retirement outcomes with a new set of tools that can help them safely grow their retirement nest egg while also ensuring a reliable stream of lifetime income. With the retirement model evolving beyond traditional pensions, lump sums and Social Security, we must work together to prepare for better and longer lives throughout retirement."

As the Prudential survey highlights, the financial challenges faced by today’s 55-year-olds are significant but not insurmountable. Consulting with a financial advisor can provide personalized guidance and strategies to help you build a more secure retirement plan. Taking action now can ensure a more comfortable and financially stable future.

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