Perhaps you have heard the doom and gloom about retirees struggling to get buy, that many live only with Social Security income. No doubt there are those that do have financial problems, but far from most retirees.
Why is that? Well, I see two reasons. First, spending in retirement is less than anticipated and second, lower income in retirement is not as low relative to pre-retirement income as it may appear. In other words, modest income before retirement is not that much less in retirement.
Retirees are doing pretty well, according to the data. While future retirees are often scared about their financial situation, most people who are already in retirement actually indicate they’re doing pretty well. In fact, a recent report from the Society of Actuaries revealed that 76% of current retirees are doing either the same as they expected they would be in retirement, or are doing better than they thought they would be.
That includes 12% who said their finances were shaping up much better than anticipated; 24% who said they were doing somewhat better financially; and 41% who felt they were doing just about how they expected they would. By contrast, only 18% are faring somewhat worse than planned, and just 6% have found their financial situation is much worse than they thought it would be when they were still working.
Of course, it’s true that some people may have simply expected financial struggles, so the fact that they’re doing as well as they expected doesn’t necessarily mean they’re flush with cash. But the fact that more than one third of American retirees are actually in better financial shape than they anticipated should be a major source of optimism for all those current workers who are frightened about how they’ll fare after leaving the workforce.