Older workers preparing to transition to retirement are focused on more than just the amount of their retirement savings—they want to achieve the freedom from financial concern that will allow them to spend time with loved ones and have experiences that provide meaning and purpose, a survey commissioned by financial services provider TIAA revealed.
The survey of 1,000 Americans ages 55-68 planning to retire in the next five years was conducted March 14-20, 2017. As well as investigating how near-retirees expect to finance their life in retirement, the survey looked at where these older Americans intend to live and travel in retirement, and how they expect to spend their time.
When asked what considerations are important to their definition of success in retirement, most of the near-retirees surveyed cited freedom from financial concern (95%); the flexibility to do what they want, when they want (96%); spending time with family and friends (93%); relaxing (92%); and having the time to travel (80%).
However, a majority of the older workers polled reported that they have changed their original retirement plans: while 37% of respondents said they expect to retire at the age they had planned 10 years ago, another 37% said they now anticipate retiring later, and 24% said they expect to retire earlier than originally planned.
The survey results also suggested that a large share of near-retirees have not fully prepared for retirement, with just 43% of respondents reporting that they have met with a financial advisor or that they have calculated how much money they will need annually in retirement. Of those respondents, 54% indicated that they feel extremely or very prepared for retirement, compared to 34% of those who said they have not met with an advisor.
Although some of the respondents expressed anxiety about their readiness for the future as they get closer to retirement, 43% said they feel extremely or very prepared for the transition to retirement, and another 46% indicated they feel somewhat prepared for retirement. Researchers pointed out that even though more than half (55%) of the near-retirees surveyed said they feel prepared to manage their income in retirement, only 21% said they anticipate their savings will last for their lifetime. The survey also showed that 65% of respondents who plan to rely on income from an annuity said they feel prepared to manage their income in retirement, compared to 54% of respondents who intend to draw down savings from a defined contribution retirement plan. However, just 17% of respondents reported having purchased an annuity as part of their retirement preparations.
The survey results further revealed that not all near-retirees plan to stop working after reaching retirement age: 31% of the men and 22% of the women polled said they have investigated part-time or consulting work, while 19% said they have considered volunteering.
In addition, the survey found that large shares of respondents plan to move in retirement. While roughly the same shares of male (40%) and female respondents (38%) said they expect to move out of their current home, they differed on where they would like to go: 61% of the men but only 49% of the women said they plan to downsize to a smaller home; and 24% of the women but just 10% of the men said they would like to move closer to family and friends.
From Benefit Trends Newsletter, Volume 60, Issue 6
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