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Retirement Planning > Spending in Retirement > Income Planning

How Differently Retirees, Pre-Retirees See the Future

By Michael S. Fischer

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What You Need to Know

  • A Gallup poll found non-retiree expectations are lower today than immediately before the pandemic.
  • Fifty-seven percent of retired participants said they rely on Social Security as a major income source. Only 38% of non-retirees believe it will be.
  • The actual mean retirement age for retirees was 62, while the mean expected retirement age for non-retirees is 64.

Eighty percent of U.S. retirees say they have enough money to live comfortably, while just 53% of pre-retirees expect to have enough money to live comfortably when they leave the workforce, Gallup reported Tuesday.

The recent Gallup survey found that the pandemic’s economic fallout has done little to change these views, especially in comparison to the much more notable downturn in non-retirees’ expectations during and immediately after the 2007–2009 recession.

In April 2020, as businesses closed and the national unemployment rate soared, 51% of nonretired Americans said they thought they would have enough money to fund their retirement adequately, down 6 percentage points from the previous year.

Their expectations remain more pessimistic today than immediately before the pandemic.

Gallup did not see the same pattern among retired U.S. adults. It said steady, broad majorities reported that they were living comfortably despite the economic upheaval of the past two years. It said retirees’ reports of their financial situation were also largely unaffected by the 2007–2009 recession.

Since 2002, Gallup polls have found that between 71% and 83% of retirees said they have enough money to live comfortably, while over the same period, only 38% to 59% of those not yet retired have anticipated a similar outcome for themselves.

Gallup said it is unclear whether these differences result from retirees being better prepared financially for retirement than today’s non-retirees, or whether non-retirees are overly pessimistic about their retirement finances.

Gallup conducted the survey in April among 331 retired adults across the U.S. and 630 non-retired adults.

Differing Expectations

As has been the case in the past, expectations of retirement among non-retirees differ based on annual income, according to Gallup. Asked whether they thought they would have enough money to live comfortably in retirement:

  • $40,000 or less: 33% said yes.
  • More than $40,000 but less than $100,000: 49% said yes.
  • $100,000 or more: 75% said yes.

Gallup found no meaningful differences by age in the current survey, but noted that in the past, younger adults were often more confident that older non-retirees in their outlooks for a comfortable retirement.

Disparities between non-retirees’ expectations and retirees’ actual experiences are also evident in their reports of retirement income sources.

Social Security Concerns

Gallup ascribed differences in reliance on income sources between those who are already retired and those who are not yet retired, at least in part, to apprehension about the Social Security system, as well as to the rise of 401(k)s accompanied by a decline in work-sponsored pension plans.

Fifty-seven percent of retired U.S. adults surveyed said they rely on Social Security as a major income source, while 38% of pre-retirees said they expect it to be a major source for them.

Likewise, 36% of retirees and 19% of non-retirees say a work-sponsored pension plan is or will be a major income source.

Almost half of pre-retirees said a 401(k) or other retirement savings account would fund their retirement, while 35% of retirees reported 401(k)s as a major funding source of their retirement.

Gallup found that non-retirees are also likelier than retirees to expect to rely on several other income sources to at least a minor degree, including other savings accounts, home equity, part-time work, rent and royalties, and inheritance money.

Retirement Age

The poll found less divergence in the two groups’ views on annuities or insurance plans or individual stock or stock mutual fund investments as an income source.

Retirement age is another area of discrepancy between retirees and those yet to retire, according to Gallup. Since 2002, the mean age at which retirees report they stopped working has been modestly lower than the mean age at which non-retirees predict they will retire.

The new poll found that the actual mean retirement age for retirees was 62, while the mean expected retirement age for non-retirees is 64, readings in line with previous findings.

Again, Gallup could only speculate about the reasons for the discrepancies. It said that with the age at which people can receive Social Security benefits higher for retirees today , many non-retirees may be delaying retirement to a later age than current retirees did.

But another possibility, it said, is that non-retirees’ plans will be altered by their employers’ staffing plans, their physical health or job market conditions, forcing them to retire earlier than they would like.

Michael S. Fischer

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