Non-retirees’ worst fears about life in retirement may not play out the way they think, according to a survey by Gallup. The analytics firm found 53% of people who are still working are worried about having enough saved for a comfortable retirement. That’s up from 51% during the pandemic lwo, and almost a recovery to pre-pandemic levels.
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However, retirees report a much different picture. Eighty percent say they are living well, down one point from April 2020, and up two points over pre-pandemic levels.
Gallup surveyed over 960 U.S. adults in April. Roughly a third of respondents were retired. Gallup has been conducting its annual Economy and Personal Finance survey since 2002.
Non-retirees ‘ retirement anxiety during the recession comes nowhere near the drop in confidence cause by the Great Recession, when confidence in the ability to live comfortably fell to 38%.
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Sources of retirement income
Retirees and non-retirees alike cite Social Security as either a major or minor source of retirement income, with only 15% of non-retirees and 10% of retirees saying they will not use Social Security. Non-retirees are much more likely than retirees to say they will use a 401k, IRA or some other retirement savings account for retirement income: 80%, compared to 61% of retirees.
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The comfortable lifestyles reported by retirees are based on a fairly limited number of income sources. After Social Security, and 401ks and other retirement savings accounts, retirees reported the following accounted for some share of their retirement income: non-retirement savings accounts (58%), workplace pension plans (56%) and individual stocks or mutual funds investments (53%).
Non-retirees reported more varied expectations about where they will get retirement income, including some that may not bear out in time. Like retirees, their top two sources of retirement income are Social Security and retirement savings accounts, followed by other savings accounts (72%).
But Gallup found that non-retirees may be overestimating how much part-time work and home equity will provide for them in retirement. Two-thirds of non-retirees expect part-time work to account for some share of retirement income, but only 15% of retirees say they have any income from part-time work, the survey found. Similarly, home equity, which two-thirds of non-retirees expect will fund their retirement to some extent, provides income for just 40% of retirees.
Non-retirees also expect income from individual stock and mutual fund investments (61%) and pensions (46%).
Related:
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- Is COVID a Catalyst for More Retirement Saving?
- Here’s How Much the Average Retiree Has Now (Hint: It’s Not Enough)