A whopping eight out of ten retirees find life in retirement better than they had originally anticipated.
That’s according to a new Spectrem Group study that examines the attitudes, behaviors and concerns of those recently retired (which it defines as those who’ve been out of the workforce less than a decade) and those retired for 20 years or more, which reveals overwhelming satisfaction with their life in retirement.
At the same time, however, Financial Wellness in Retirement finds that nearly half of retirees failed to begin planning until just five years before they left the workforce, with nearly a quarter acknowledging that it wasn’t until the year they retired that they started planning for life after work.
The quantitative portion of the study indicates that 53 percent of retirees sought professional advice for their retirement planning, with nearly a third indicating that the reason they didn’t was that in their opinion professional retirement planning services cost more than the value delivered.
Once retired, the lion’s share of retirees’ monthly income comes from pensions and Social Security, which together comprise 58 percent of monthly cash flow among those surveyed.
Nearly seven in ten retirees said they use a financial advisor. While retirees share common everyday concerns about budgeting and spending, the single greatest challenge they expressed was in managing and dealing with medical care, a concern shared by one in four retirees.
Other key findings include:
- 42 percent claim Social Security benefits at age 62, the earliest age one is eligible to receive the benefit.
- Just 27 percent previously worked for companies with a workplace financial wellness program that educated them about retirement, social security, insurance and other matters relevant to planning for retirement.
- Fully a quarter (25 percent) continue to have a mortgage on their primary residence, and almost four in ten (39 percent) have a mortgage or loan on a second home. The longer an investor has been in retirement, the more likely they are to have mortgages or loans on their property.
- While 89 percent have a will, only about half (54 percent) said they have an estate plan. Those with children are more likely to have an estate plan than childless retirees (56 percent vs. 46 percent).
“The good news is that most retirees are in the enviable position to pursue new interests, step back from the day-to-day stresses of life, and spend more time with their family,” said Spectrem President George H. Walper, Jr. “However, ensuring sufficient income in retirement requires advanced planning. Our research has found that retirees who receive help from an advisor in planning for retirement often appreciate the fact that a plan is in place, and are reassured that their assets will likely outlive them.”