This year’s Retirement Confidence Survey reveals that there is often a gap between pre-retiree expectations of retirement and retirees’ reality. These include when and how retirement happens, what days will look like, and finances in retirement. Here are some key findings to help you make informed decisions for a smoother transition into retirement.
Retirement Expectations vs. Reality:
Workers retire earlier than they think they will
- Over half of workers expect to retire at 65 or older
- But most retirees, 70%, report retiring earlier than 65
- Median retirement age of 62 over the life of the survey
- Compared to median expected retirement age of 65
Why do workers retire earlier then they think they will?
- Because they could afford to ~39%
- A reason out of their control ~63% (i.e., Due to hardship, such as a health problem or disability, or changes at their employer)
Workers expect to work for income in retirement
- 75% of workers think they’ll work for pay in retirement
- Only 30% of retirees report that they have worked for pay since retiring
Workers desire to transition into retirement
- Over 50% of workers desire to retire gradually, over time
- But over 70% of retirees report a “full stop” experience
Workers expect to spend less in retirement
- Over 50% of retirees say their overall spending is higher than they expected
- Up from last year, 35% of retirees say their travel, entertainment or leisure expenses are more than they expected
- Despite higher than expected costs, 30% of retirees say their overall lifestyle in retirement is better than they expected
Financial preparation is crucial to bridging the gap between expectations and reality. Nearly two-thirds of workers (62%) report that preparing for retirement makes them feel stressed. And only one in five American workers feel very confident about their ability to afford a comfortable retirement.
Whether you are still working or already retired, our goal is to take the financial burden off your shoulders so you can focus on what matters most to you. We plan for both the expected and the unexpected so you can make informed choices that best meet your needs.
Want to know if you could retire earlier, spend more in retirement, or move to a different state? We can show you what that looks like.
Are you worried social security might not exist when you retire, or your benefit will decrease? Our financial planning team can model several “what-if” scenarios.
The ability to illustrate the impact of changes on your retirement goals allows us to brainstorm ways to address your concerns, mitigate risks and confidently plan for your future.
Source: Retirement Confidence Survey (ebri.org) conducted by the Employee Benefit Research Institute (EBRI) and Greenwald Research.
