Fewer than one in four, or only 17% of Americans over 50, are very confident that they can maintain a comfortable lifestyle in retirement, while over 50% fear outliving their savings, according to a new survey report released by nonprofit Transamerica Center for Retirement Studies® (TCRS), in collaboration with Transamerica Institute®.
The survey, Life in Retirement: Pre-Retiree Expectations and Retiree Realities, compared the retirement preparations and expectations of workers aged 50+ with the experiences of retirees. The survey examined their visions of aging and retirement, when and how retirement happens, life in retirement and their finances.
“Our research finds that retirees are happy, purposeful and have a positive view of aging. However, many are financially vulnerable and risk running out of savings. Their cautionary tale underscores the imperative for strengthening our retirement system,” said Catherine Collinson, CEO and president of Transamerica Institute and TCRS.
Workers fear outliving their savings
According to the survey, the greatest retirement fear among age 50+ workers is outliving their savings and investments, including 45% of aged 50+ workers and 32% of retirees. The greatest fear among retirees is that Social Security benefits will be reduced or cease to exist in the future, including 42% of workers 50+ and 39% of retirees. Many workers over 50 and retirees also fear declining health that requires long-term care and possible long-term care costs.
Planning mistakes to avoid
The survey also revealed common mistakes both groups often make that could be addressed by engaging in more rigorous planning, and included:
- Being overly optimistic about retirement expectations.
- Overlooking life expectancy and how it relates to time in retirement.
- Claiming Social Security benefits too early.
- Taking inadequate steps to safeguard health.
- Failing to plan for long-term care.
- Not seeking assistance from a professional financial advisor, if needed.
“Retirees and pre-retirees have limited financial means, and are susceptible to the turbulent economy and inflation. A harsh reality is that many lack the resources to cover the cost of a major financial shock. If a market downturn, personal health emergency, or natural disaster strikes, many may find themselves in a dire situation,” said Collinson.
For the past 18+ years, Kathryn has highlighted the humanity in personal finance by shaping stories that identify the opportunities and obstacles in managing a person's finances. All the same, she’ll jump on other equally important topics if needed. Kathryn graduated with a degree in Journalism and lives in Duluth, Minnesota. She joined Kiplinger in 2023 as a contributor.
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