Virginia Taxpayers Could Bear Financial Brunt of States Retirement Savings Deficiencies

Research reveals that as little $40 a week can bridge savings gap

Virginians Could Bear Brunt of Retirement Savings Deficiencies

Overview

Workers in the United States accumulate the vast majority of their retirement savings through employer-based plans, but large gaps in coverage exist. Virginia is no exception, with at least 1 in 3 workers lacking access to a workplace plan.

As in the rest of the country, the number of vulnerable older households in Virginia—those aged 65 and older with less than $75,000 in annual income—is expected to increase by 25% from 2020 to 2035, while the working age population will only grow by 5%. As Virginia workers age, inadequate retirement savings not only will force a reduction in the quality of life for many of them entering their golden years but also will put pressure on public spending and increase taxpayer burdens. According to The Pew Charitable Trusts in consultation with Econsult Solutions Inc., Virginia can expect to spend an additional $11.8 billion from 2020 to 2035 on costs such as Medicaid1 because of insufficient retiree savings.2 This obligation will be borne by an ever-smaller share of the overall population. The aged dependency ratio—the ratio of households age 65 and older to those of working age—is expected to grow by nearly 24%, further stretching the tax base. In 2020, there were 34 households age 65 and over for every 100 households ages 20-64. In 2035, that number will grow to 43 households age 65 and over for every 100 working-age households.

Fortunately, even small savings now could offset the shortfall. The study finds that if households saved just $1,9303 a year—or about $40 a week—over this 15-year period, they could erase the retirement savings gap and allow for a retirement without lifestyle changes driven by inadequate savings.

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Cumulative taxpayer liability because of insufficient savings, 2021–35

$1,460$14,020

From a 2020 baseline, Accomack County can expect to see the following as a result of an aging population through 2035 (and as compared to statewide results):

Virginia
Accomack County
25% 16%
16%
Increase in vulnerable older households, 2020–35
$8,010 $6,260
$6,260
Average annual income shortfall for vulnerable older households, 2035
24% 42%
42% increase
Change in the ratio of older to working-age households, 2020–35
$4,810 $3,140
$3,140
Cumulative taxpayer liability because of insufficient savings, 2021–35
$1,930 $1,510
$1,510 a year
or $126 a month
Additional annual household savings (30 years) required for adequate savings in retirement, 2035

In 2035, on average, Accomack County’s vulnerable older households can expect an annual income shortfall of $6,260 due to insufficient savings. Without new saving, county taxpayers will need to pay a cumulative $3,140 from 2021 to 2035 to maintain existing social services to older residents. The burden is exacerbated by the fact that the aged dependency ratio—the number of aged 65 and older households to households aged 20-64—will rise by 42%, meaning an increasingly smaller percentage of the population will bear the cost.

However, household savings of just $1,510 a year—$126 a month—over this period can erase the gap and allow for a retirement without lifestyle changes driven by inadequate savings.

Select counties or cities to filter the table.

Legend: statewide average line
City or county Taxpayer burden Vulnerable household increase Dependency ratio increase Average income shortfall Additional savings required
Virginia
4,810
25
24
8,010
1,930
Accomack County
3,140
16
42
6,260
1,510
Albemarle County
7,710
29
12
7,590
1,830
Alexandria
6,170
60
25
6,800
1,640
Alleghany County
2,800
0
25
8,120
1,960
Amelia County
2,770
36
32
6,840
1,650
Amherst County
2,710
9
26
8,100
1,960
Appomattox County
2,570
36
26
6,900
1,670
Arlington County
6,830
13
10
8,280
2,000
Augusta County
3,310
25
21
7,160
1,730
Bath County
4,170
8
33
7,210
1,740
Bedford County
3,690
28
32
7,670
1,850
Bland County
2,130
-13
14
7,570
1,830
Botetourt County
4,430
14
24
8,840
2,140
Bristol
4,120
-13
3
6,820
1,650
Brunswick County
2,040
3
23
6,800
1,640
Buchanan County
2,070
-8
35
5,730
1,380
Buckingham County
1,690
23
23
6,520
1,580
Buena Vista
2,020
-5
-5
6,330
1,530
Campbell County
3,060
9
17
7,850
1,900
Caroline County
2,790
28
11
7,480
1,810
Carroll County
2,170
9
21
7,160
1,730
Charles City County
3,350
30
33
8,240
1,990
Charlotte County
2,250
7
28
7,000
1,690
Charlottesville
4,810
55
33
5,460
1,320
Chesapeake
3,820
42
39
7,400
1,790
Chesterfield County
4,560
41
21
8,990
2,170
Clarke County
5,400
19
35
7,850
1,900
Colonial Heights
5,710
13
14
8,820
2,130
Covington
3,240
13
28
7,570
1,830
Craig County
2,290
13
35
7,120
1,720
Culpeper County
4,100
40
25
7,190
1,740
Cumberland County
2,050
4
12
8,400
2,030
Danville
3,780
-4
24
7,040
1,700
Dickenson County
1,780
-12
15
5,860
1,420
Dinwiddie County
2,580
10
14
7,980
1,930
Emporia
4,140
-14
10
13,400
3,240
Essex County
3,880
16
8
6,480
1,560
Fairfax
7,830
20
23
7,790
1,880
Fairfax County
7,050
23
16
10,130
2,450
Falls Church
10,050
0
4
10,330
2,500
Fauquier County
7,130
24
32
8,210
1,980
Floyd County
3,470
10
16
7,920
1,910
Fluvanna County
3,320
28
19
5,810
1,400
Franklin
3,440
-17
7
9,870
2,380
Franklin County
3,020
20
15
7,140
1,720
Frederick County
4,400
35
28
7,350
1,780
Fredericksburg
5,610
24
9
6,660
1,610
Galax
4,390
-1
14
6,740
1,630
Giles County
2,650
4
18
7,490
1,810
Gloucester County
3,570
29
39
7,320
1,770
Goochland County
9,820
40
34
7,170
1,730
Grayson County
1,830
7
52
7,380
1,780
Greene County
3,330
49
42
5,900
1,420
Greensville County
2,160
9
23
7,840
1,890
Halifax County
2,710
-5
21
7,640
1,850
Hampton
3,010
21
40
7,530
1,820
Hanover County
5,670
22
41
9,390
2,270
Harrisonburg
3,220
24
5
7,430
1,790
Henrico County
5,280
28
22
8,570
2,070
Henry County
2,470
8
36
7,530
1,820
Highland County
2,700
32
39
4,860
1,170
Hopewell
2,350
9
20
6,860
1,660
Isle of Wight County
3,680
27
40
7,130
1,720
James City County
6,930
86
25
6,250
1,510
King and Queen County
2,400
8
23
7,120
1,720
King George County
4,170
47
31
6,220
1,500
King William County
3,200
32
22
7,750
1,870
Lancaster County
5,260
26
13
4,710
1,140
Lee County
1,460
0
3
6,110
1,480
Lexington
3,180
-20
-12
8,510
2,060
Loudoun County
7,550
63
75
10,820
2,610
Louisa County
3,740
47
24
6,590
1,590
Lunenburg County
1,800
9
17
6,600
1,600
Lynchburg
3,290
13
-4
6,350
1,530
Madison County
6,330
16
22
7,090
1,710
Manassas
3,960
41
34
9,720
2,350
Manassas Park
3,530
58
47
9,130
2,200
Martinsville
2,840
0
35
6,970
1,680
Mathews County
3,350
8
19
7,530
1,820
Mecklenburg County
3,640
9
21
6,610
1,600
Middlesex County
3,560
16
11
7,240
1,750
Montgomery County
3,140
41
17
6,260
1,510
Nelson County
14,020
36
9
5,780
1,400
New Kent County
4,230
33
42
8,840
2,130
Newport News
3,130
30
29
6,830
1,650
Norfolk
2,880
29
24
6,470
1,560
Northampton County
3,690
9
27
5,840
1,410
Northumberland County
3,600
16
9
5,080
1,230
Norton
4,400
-14
9
5,980
1,440
Nottoway County
2,280
23
27
6,530
1,580
Orange County
4,720
35
14
6,760
1,630
Page County
2,610
16
25
6,550
1,580
Patrick County
2,120
10
41
6,750
1,630
Petersburg
2,200
24
26
6,930
1,670
Pittsylvania County
2,310
17
26
7,150
1,730
Poquoson
4,380
-15
21
10,500
2,540
Portsmouth
2,490
23
28
6,770
1,630
Powhatan County
4,540
44
46
8,500
2,050
Prince Edward County
2,470
46
13
4,920
1,190
Prince George County
2,680
81
61
6,230
1,510
Prince William County
4,520
72
41
8,900
2,150
Pulaski County
2,950
8
21
6,720
1,620
Radford
1,740
8
-1
8,170
1,970
Rappahannock County
6,450
10
11
5,200
1,260
Richmond
4,570
19
12
6,930
1,670
Richmond County
3,110
15
27
7,550
1,820
Roanoke
3,610
16
17
6,580
1,590
Roanoke County
4,510
3
13
8,920
2,150
Rockbridge County
4,060
26
29
6,730
1,630
Rockingham County
4,140
36
27
7,380
1,780
Russell County
2,060
0
32
6,610
1,600
Salem
4,860
7
18
7,460
1,800
Scott County
1,990
0
18
6,970
1,680
Shenandoah County
3,830
22
10
7,160
1,730
Smyth County
2,290
0
20
7,240
1,750
Southampton County
2,410
28
50
6,540
1,580
Spotsylvania County
4,360
42
32
8,170
1,970
Stafford County
4,170
40
46
9,580
2,320
Staunton
3,850
4
16
7,920
1,910
Suffolk
3,390
46
31
6,490
1,570
Surry County
3,260
20
40
6,840
1,650
Sussex County
1,930
15
26
7,220
1,750
Tazewell County
2,730
-8
7
6,710
1,620
Virginia Beach
4,090
45
39
7,310
1,770
Warren County
3,660
38
29
7,050
1,700
Washington County
3,470
13
16
6,790
1,640
Waynesboro
3,930
8
8
6,910
1,670
Westmoreland County
2,910
9
11
5,660
1,370
Williamsburg
6,210
23
-2
5,780
1,400
Winchester
5,230
25
15
6,170
1,490
Wise County
2,000
-3
4
5,820
1,410
Wythe County
3,290
14
21
6,970
1,680
York County
4,820
16
29
8,850
2,140

Notes

1. Program spending includes Medicaid (long-term care, general Medicaid services, payment for the Medicare drug program, and payment for Medicare Part A and B premiums); the Auxiliary Grant program; the Virginia Public Guardianship and Conservator Program; additional senior-targeted programs (the Virginia Adult Services Program, Adult Protective Services, the Older Americans Congregate Nutrition Program and Home-Delivered Nutrition Programs, and additional Aging Services sub-programs offered by the Department for Aging and Rehabilitative Services).

2. Sufficient income for residents age 65 and over is defined as 75% of their annual working age (50-64) income, with a minimum retirement income of the federal poverty level. Incomes above $75,000 for older residents are considered sufficient regardless of the proportion of working-age income replaced.

3. All dollar amounts in this publication are in 2020 dollars and do not account for inflation.