For our purposes, here are some of the key findings:
Sharp Increase in Retirement Concerns
- Retiree concerns about the various risks associated with retirement, which had remained fairly stable throughout the previous five surveys, increased sharply in 2011. Pre-retiree concern about many risks also increased, approaching or equaling the spike in pre-retiree concern measured in 2003.
- Retirees and pre-retirees continue to express the highest level of concern about the value of their savings and investments keeping up with inflation (69 percent of retirees and 77 percent of pre-retirees very or somewhat concerned).
- Retirees and pre-retirees also report high levels of concern about having enough money to pay for adequate health care, having enough money to pay for long-term care in a nursing home or at home, being able to maintain a reasonable standard of living for the rest of their lives, income varying based on changes in interest rates, and depleting all of their savings.
Steps Taken to Improve Retirement Situation
- Retirees and pre-retirees continue to rely on reducing spending, increasing savings, and debt reduction to manage retirement risks. More than half report they have already cut back on spending and tried to save as much as possible. Approximately half also say they have eliminated all of their consumer debt (editorial comment from me...Great!).
- Others use asset management strategies to protect themselves against financial risks. At least half of retirees and pre-retirees report they have already invested money in stocks or stock mutual funds. Many have also moved their assets to less risky investments as they age.
- Retirees are more likely than in 2009 to report having already implemented several risk management strategies, including saving as much as possible, cutting back on spending, and buying an annuity or choosing an annuity option from an employer plan. Pre-retirees are more likely than in 2009 to indicate they have already bought an annuity or chosen an annuity option from an employer plan.
How Long Will We Live after Retirement?
- There is a strong tendency toward underestimating average life expectancy. When asked to estimate how long the average person their age and sex can expect to live, more than six in ten retirees and half of pre-retirees provide a response that is below the average. Only about one-quarter overestimate average life expectancy.
- Compared to 2005 results, pre-retirees are more likely to overestimate average life expectancy. Retiree estimates of average and personal life expectancy have changed little.
- Retirees and pre-retirees most often say they would need to reduce their expenditures significantly if they were to live five years longer than expected. Other steps would include dipping into money that might otherwise be left to children or other heirs, depleting all of their savings, and downsizing their housing.
When Will We Retire?
- More than eight in ten retirees report they retired before the age of 65. However, half of pre-retirees indicating they will retire say they expect to retire at age 65 or later. This difference between expected and actual retirement age has been observed in prior studies in this series.
- While three-quarters of retirees report they retired by stopping work all at once, only about four in ten pre-retirees plan to retire that way. Instead, pre-retirees plan to gradually reduce the number of hours they work or continue to work part time in retirement. One-third of retirees who stopped work all at once eventually returned to paid employment.
- Retirees who worked in retirement and pre-retirees who plan to do so say major reasons for working are to stay active and involved and wanting additional income.
- Two in ten retirees working in retirement and three in ten pre-retirees who plan to work in retirement report they started or plan to start a small business or become self-employed.
Survey differences between men and women
- Among both retirees and pre-retirees, women are more likely than men to express concern about most of the retirement risks mentioned in the study. They are also more likely to have cut back on spending to help manage these risks.
- Women tend to provide estimates of population and personal life expectancy that are three to five year higher than the estimates provided by men. They are also more likely to think there would be negative financial consequences if they lived five years longer than expected.
- Among retirees, men are more likely than women to report having received money or income from a defined benefit plan and to be currently receiving guaranteed income other than Social Security.
- Among pre-retirees, a larger percentage of women than men think they need to save more money and work longer as a result of the changes in the stock market and the economy.
We know what to do to help ourselves though we don't always follow through. Women tend to be more realistic than men about the problems ahead and what steps they will have to take. If you'd like to read the entire report it is available here: Full Research Report
Did you learn anything new or have any of your beliefs reaffirmed?