For most Americans, retirement is a time to enjoy the fruits of decades of work. Sadly, that is not always the case. For those looking to retire, or who had recently entered retirement, in 2007 to 2009, retirement looked much different than they had planned for. Many had to push back their retirement or make adjustments to the lifestyle that they were expecting to enjoy in the aftermath in the roughly 50% decline in the U.S. stock market.
AAII Weekly Survey Question
Do you expect life in retirement will be the best of times—or a step backward?
That was the question on my mind when I asked last week’s survey question:
Is your life in retirement better or worse than it was when you were working?
However, we wanted to see how the responses differed between those who are already retired and those who have yet to retire. So, we first asked whether our readers were retired.
Of the 2,419 readers who responded, 80.7% are retired and 19.3% have yet to retire.
Weighting the results based on whether or not they are retired, here are the results:
Click on the pie chart to open a larger, easier-to-read version.
Since the pie chart above represents results that are weighted based on whether or not a respondent is retired, those already retired had a greater impact on the overall results, since they represented the majority of participants. The readers already retired accounted for nearly 81% of participants.
Among those who are retired, here is how they answered:
- Life in retirement is better than when I was working: 69.4%
- Life in retirement is worse than when I was working: 5.5%
- Life in retirement is the same as when I was working: 25.1%
These results indicate that people who have yet to retire are slightly less optimistic about the quality of life they will have in retirement relative to how retired life rates for those who are now retired compared to when they were working.
To illustrate this point, here is how those who have not yet retired answered:
- Life in retirement will be better than when I was working: 64.7%
- Life in retirement will be worse than when I was working: 6.4%
- Life in retirement will be the same as when I was working: 28.9%
Weekly Special Question
Undoubtedly, the way our readers answered was swayed by their money outlook for retirement.
To see the biggest money worries our readers have for retirement, last week’s special open-ended question asked:
Whether you are working or retired, what is your biggest financial worry for retirement?
In all, we received 1,115 responses to this question.
Analyzing the responses, four distinct categories developed:
- Expenses and spending: 52.5%
- State of the economy or stock market: 29.0%
- No worries: 9.9%
- Political risk: 8.6%
The biggest single financial worry our readers have for retirement is not having enough money, with nearly 24% of the responses.
Coming in a close second, nearly 23% of our readers worry about the cost of health care while in retirement.
Rounding out the top three responses, almost 18% of our readers listed a severe market downturn as their biggest financial worry for retirement.
Here is a sampling of the responses to the special question:
- “A prolonged major market downturn.”
- “Achieving inflation-beating returns with low risk.”
- “Central banks keeping interest rates unremunerative on the one hand while blowing financial asset bubbles destined for collapse on the other.”
- “Outliving our resources.”
- “Possible medical expenses.”
- “A catastrophic illness or property loss not properly planned for.”
- “Adapting my financial strategy to the changing needs and climate surrounding my retirement.”
- “Abnormal inflation.”
- “Long-term care costs.”
- “That my kids blow their inheritance and end up poorly in retirement.”
- “Well prepared for retirement—no worries!”
- “Management of my portfolio in extreme old age.”
- “Mitigating the taxes on my retirement savings”
Everybody has an opinion! Why not give us yours? Participate in our weekly member poll, updated every Monday, and see the results online at www.aaii.com/memberquestion.