According to the latest Retirement Confidence Survey, workers who said they feel somewhat confident in their ability to afford a comfortable retirement is up from 64% in 2023 to 68% in 2024. Even though their confidence is up, 62% of workers report that preparing for retirement makes them feel stressed.
The gap between retiree expectations and reality persists. Here are 6 key findings from this and other surveys:
- 65% of workers expect to retire at 65 or older (or never). However, 70% of retirees left work before the age of 65, with a median retirement age of 62.
- Over 50% of workers desire to retire gradually, over time. However, 70% of retirees reported a “full stop” experience due to factors that were “out of their control” like illness or job change.
- Most workers expected to spend less in retirement. However, 50% of retirees said their overall spending is higher than they expected. 35% say travel, entertainment, or leisure expenses are higher than expected. The silver lining is that, despite these higher-than-expected costs, 30% of retirees said their overall lifestyle in retirement is better than they expected.
- Although 75% of workers expect to work for pay in retirement, the reality is that only 30% of retirees report any sort of work-related income.
- Workers who calculate how much money they will need in retirement are more likely to start saving more. 52% of workers started to save more. According to the survey, this renewed interest in saving is spurred by the drastic difference in what they believe they’ll need for retirement compared with how much they currently have saved.
- Nearly half (47%) of all retirees report their expenses in retirement are higher than they expected, and 49% believed Medicare would cover more of their healthcare expenses.
Most retirees, 58% admit they have no idea how long their savings will last, and 63% wish they had done more planning prior to retiring. You don’t have to be (or want to be) part of this group.
Planning now is key to aligning retirement expectations with reality. If you’re feeling stressed and uncertain about your retirement prospects, you’re not alone. We can help alleviate your financial worries by answering some of the unknowns like:
- How much do I need to save to be able to live the retirement I envision for myself?
- Can I retire earlier? Can I spend more in my retirement? What about if I move to a different state or country? How will all these variables affect my overall financial picture?
- How will rising healthcare costs, taxes, and inflation impact my retirement?
- What if the stock market tanks X% soon after I retire? What if I need to tap into social security sooner?
Our financial planning team can model these and other “what-if” scenarios for you. It’s a dynamic process to help you prepare for retirement more confidently and then enjoy it once it has arrived.
Sources: Retirement Confidence Survey (ebri.org) conducted by the Employee Benefit Research Institute (EBRI) and Greenwald Research. Schroders Retirement Study.
