Retirees are returning to their 2008 attitudes about finances, a report released by the Society of Actuaries, LIMRA and the International Foundation for Retirement Education found, even if they’re not quite there yet. Retirees feel more financially secure now than they did in 2009, the last time the survey was conducted. They are more confident and have less household debt. Furthermore, they’re more conservative than they were in 2008 and have maintained the spending levels they used in 2009 rather than 2008.
“When it comes to having enough to live comfortably, confidence levels are back to what we saw in 2008,” Sally Bryck, assistant research director for LIMRA, said Wednesday during a webinar announcing the results of the study. “Once the major crisis started to turn around, retirees’ confidence did too.”
Despite these encouraging signs of financial recovery, retirees are still facing significant challenges, namely that despite their increased feelings of confidence, many of them still don’t know how long their assets will last.
“There’s a gap between what people are feeling and how they are behaving,” Anna Rappaport, actuary and chairperson for the Committee on Post-Retirement Needs and Risks for the Society of Actuaries, said.
Over half of retirees say they feel as financially secure as they thought they would be when they first retired, and 16% say they are more secure. However, 36% have not estimated how long their assets might last, and 10% haven’t thought about it.
Longevity continues to be a challenge for retirees. In 2008, 65% were aware that their investments needed to last at least 20 years; that percentage has fallen to 45% in 2011.
“How can they confidently manage their assets when they don’t know realistically how long it needs to last?” Betty Meredith, director of education and research at the International Foundation for Retirement Education, asked.