Less than one in four retirees believe they’ll have a comfortable lifestyle in retirement, finds new research out today by the Transamerica Center for Retirement Studies (TCRS).
The firm’s report, “Retiree Life in the Post-Pandemic Economy,” analyzes how U.S. retirees are understanding their retirement security following the coronavirus pandemic in 2020. The study found that years after the pandemic, retirees continue to juggle competing financial responsibilities. According to the research, retirees’ top financial priorities include building emergency savings (31%), covering basic living expenses (29%), and continuing to save for retirement (24%). Forty-five percent of retirees are still paying off one or more forms of debt, including credit cards (30%), mortgages (20%), consumer debt (10%), or student loans (3%).
As they struggle to understand how they’ll afford conflicting financial priorities, retirees say their greatest fears revolve around money and health. Forty-two percent of respondents are nervous about the future of Social Security, with some believing it will either be reduced or eradicated. In fact, TCRS’ study found that 58% of respondents survey expect Social Security to be their primary source of income throughout retirement.
Others worry about outliving their savings and investments (32%), losing their independence (32%), and declining health that could require long-term care (37%).
“Retirement brings freedom and time for personal pursuits,” said Catherine Collinson, CEO and president of Transamerica Institute and TCRS. “However, retirees are living on a fixed income with limited financial resources. Many would be unable to withstand a major financial shock, such as the need to pay for long-term care. Retirees’ fragile financial situation serves as a cautionary tale that underscores the imperative for strengthening our retirement system.”
The research also polled respondents about their prior regrets in saving for the long-term. More than three-quarters said they wished they would have saved more and on a consistent basis, while 68% wished they had been more knowledgeable about retirement saving and investing. Half said they would have liked additional information from their employer on how to reach retirement goals, 49% said their debt got in the way of saving for retirement, and another 49% believed they waited too long to start saving and investing.
“By gaining knowledge and taking greater control of their financial situation, retirees can make better informed decisions to optimize and protect their income and savings,” said Collinson. “At the same time, policymakers, industry, employers, nonprofits, and individuals and families must join together to innovate solutions so that current and future generations of retirees can retire with confidence and dignity.”
Additional insights from the report can be found here.
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