Retirees Have Few Money Worries, Survey Shows

When it comes to figuring out retirement income and how to manage finances in the post-employment years, employees worry about it while retirees make it work.

That’s one of the conclusions in the 28^th annual Retirement Confidence Survey conducted by the Employee Benefit Research Institute.

This year’s survey focused on expectations and experiences on managing retirement finances and generating income in retirement.

The survey found notable differences between those who are within five years of retirement and those who already are retired. In particular, workers tended to worry about their finances while retirees were more financially secure.

More than half – 56 percent - of pre-retirees said they frequently worried about their finances while only 36 percent of retirees said they did. In addition, only 23 percent of retirees said they found it difficult to manage their finances.

“What this shows us is that this is what people do in retirement – they manage their finances and they learn how to do it,” said Matt Greenwald, CEO of Greenwald & Associates, who conducted the survey.

Notable Difference

When it comes to being confident in their ability to live a comfortable lifestyle in retirement, there also is a notable difference between those who are anticipating retirement and those who are already there.

Fifty-four percent of workers said they were not confident in their ability to live comfortably in retirement, but only 29 percent of retirees found it difficult to maintain their lifestyle.

“The main point here is that it seems more difficult when people are anticipating retirement but then they adapt when they get there,” Greenwald said.

Workers are more pessimistic about managing retirement finances compared with their retired brethren. Much of that is driven by a fear of the unknown, especially regarding the cost of health care, said Craig Copeland, EBRI senior research associate.

Having a retirement plan at work also has a positive impact on an employee’s confidence in being able to maintain their finances in the post-working years, he said.

In addition, many retirees have income from a defined benefit plan or pension plan as well as Social Security, so they don’t need to be concerned about drawing down assets, Copeland said.

“What we see is that people adapt as they go from the unknown to the known,” he said.

People who currently are in the workforce may not have access to the types of employee pensions that typically were common. But many workers believe much of their retirement income will come in the form of a paycheck – many are banking on continuing to work during retirement, Copeland said.

Working A Plan

But the reality among current retirees is that only one in four is working in their retirement, he said. In addition, many who anticipate working into their retirement years find that plan derailed by circumstances that force them out of the workplace earlier than they had expected.

Generating retirement income is a major concern for those both anticipating retirement and those who already are there. The study showed 35 percent of workers expect guaranteed income to be a source of retirement funds.

But workers face a critical need for education in how to convert their assets to income in retirement, said Toni Griffin, MetLife assistant vice president.

Having an advisor makes a difference in helping retirees convert their savings to income in retirement, Copeland added.

The survey showed those who worked with an advisor were more likely to roll over their workplace savings into an individual retirement account or a product that produced guaranteed monthly retirement income, he said.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.

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