Financial Planning, Retirement

Why Are Many Americans Not Able To Enjoy Retirement

5/11/16 8:00 AM

iStock_000013512481_Small-1-1.jpgYesterday we learned that Americans’ overall level of retirement satisfaction has declined in recent years, and new research from the Transamerica Center for Retirement Studies (TCRS) provides clues as to why this might have occurred. For example, 42 percent of surveyed retirees described “just getting by and/or covering basic living expenses” as a top financial priority for them at the moment, and 32 percent said the same about paying for healthcare. Thirty-seven percent of retired respondents said that they are still paying off mortgages, and a quarter reported that they have outstanding credit card balances. The median annual income that surveyed retiree households are living off of currently is a modest $32,000, and for 89 percent Social Security is the "cornerstone" of their retirement income.

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The median age that those currently receiving income from Social Security started collecting benefits was 62, implying that many retirees might have been better off if they had waited to avoid the significant reductions to their monthly benefits. Moreover, 60 percent of respondents said that they retired sooner than planned. Two-thirds blamed this on employment-related reasons but “ill-health” was also a popular response. Only 12 percent of respondents who retired sooner than planned said that they did so because they saved enough money to retire early. Less than half (46 percent) of respondents believe that they have built “a large enough retirement nest egg" but 72 percent are still “somewhat” or “very” confident that they will be able to maintain a comfortable lifestyle in old age. Such sentiment could be a bit overoptimistic because 70 percent of respondents expect that they will have to fund more than 30 years of retirement with their savings and other sources of income.

 


 

Sources: Transamerica Center for Retirement Studies, NAPA

Post author: Charles Couch