The middle class is often described as the beating heart of American society. A comfortable retirement has long been seen as a just reward for their contribution to building the richest country in the world. But they are calling for support in preparing for retirement.
Accounting for around half of the US population, the middle class has seen its fortunes rise and wane over the past few decades. Retirement, once considered a natural and inevitable stage of life, is evolving as many people live healthier for longer.
Some people don’t plan to stop working at all because they want to stay active or because they want to maintain an income. And for those who do, want to retire, the responsibility to organize a well-funded retirement is increasingly falling on their own shoulders.
There is rising awareness that government and policymakers are essential partners in helping retirees manage the financial, health, and lifestyle changes that come with this transition. So, too, are companies like Transamerica, Aegon’s US business, which CEO Will Fuller says is uniquely positioned to serve the middle class through its vast, diverse agent network and its insurance, retirement and investment solutions designed to help everyday Americans thrive.
Without meaningful support from these key players, many aspiring retirees fear they may not achieve the security and fulfillment they have worked towards their entire lives. So, let's have a closer look at who they are and what they need.
Who are the middle class?
The nonprofit Transamerica Institute (TI) defines the middle class as those earning between $50,000 and $200,000 annually—a group that represents approximately 50% of the U.S. population. Research by TI and its Transamerica Center for Retirement Studies (TCRS) sheds light on the aspirations and concerns of middle-class Americans as they approach retirement.
One of the most striking findings is that middle-class Americans plan to live long lives, with a median life expectancy of 90 years. A smaller, yet substantial portion (14%) even anticipates living to 100 or beyond. With these long-life expectancies, the pressure to save enough to last through retirement is immense.
Middle-class Americans are dreaming of an active retirement. The top five goals cited by this group included traveling (67%), spending more time with family and friends (58%), pursuing hobbies (51%), volunteering (23%), and caring for grandchildren (20%). These aspirations align with the broader desire to enjoy a meaningful and fulfilling post-work life. However, people also highlighted concerns about financial stability and healthcare access.
Policy priorities
When asked about their greatest retirement fears, the top worries among middle-class Americans are outliving their savings and investments and declining health that requires long-term care (both 40%), and that Social Security will be reduced or cease to exist in the future (39%). These concerns highlight the increasing pressure on individuals to manage their own retirement savings while also depending on government programs that may face funding challenges in the future.
Ahead of the upcoming U.S. presidential election, 65% of respondents in the survey urged political leaders to prioritize addressing the Social Security shortfall, while 53% called for reforms to Medicare. This growing demand for a more secure retirement system underscores the need for policymakers to strengthen safety nets and provide individuals with the tools they need to navigate an uncertain financial future.
Catherine Collinson, CEO of Transamerica Institute and TCRS, notes, “Our nation faces a tremendous opportunity to future-proof our retirement system to help middle-class Americans protect their health, build wealth, and retire with dignity.”
A collective effort among policymakers, industry leaders, and individuals can ensure a bright, secure future for all, Collinson adds.
Catherine discusses the main takeaways of the middle class research report in this 15-minute podcast.
The challenge and actions needed go wider and extend to all socioeconomic groups in the US. The TI/TCRS report American Voices: Public Policy Priorities for Retirement Security goes into more detail on what should be the top priorities for the President and Congress.
What can individuals do?
The report also points to initiative-taking steps individuals can take to improve their retirement prospects. These include embracing financial literacy, maximizing savings, and prioritizing health.
With the right planning and support, a long and prosperous life is within reach for those willing to act today. This is where Aegon’s businesses, such as Transamerica in the US, can contribute by providing products and advice that can support people in building the financial foundations they need to be able to live their best lives and enjoy the retirement they deserve.