Will your retirement dreams match your reality?
That's perhaps the most critical question to ask people who are currently retired. Was your retirement what you expected, or was it something else?
For more than 30 years, the Employee Benefit Research Institute (EBRI) has conducted the Retirement Confidence Survey, which gauges the views and attitudes of working-age and retired Americans regarding retirement and their preparations for retirement.1
Part of the survey takes a deep dive into workers' expectations for sources of income in retirement versus retirees' actual income sources.
Here's a couple of highlights of the 2021 survey:
- Only 33% of workers expect Social Security to be a significant source of retirement income. But, in reality, 62% of retirees say it's a significant source.
- Further, more than 50% of workers believe that workplace retirement savings plans will be a significant source of retirement income. But the 2021 survey found that workplace plans are an essential source for only 20% of retirees.
Are you surprised? We're not. These numbers are consistent year after year. Here's another nugget to consider: 26% of workers plan to work for pay in retirement. In reality, only 7% of retirees do.
Utilizing a retirement calculator is helpful to see if you're on track with your ideal retirement age.
For most, retirement is the "next chapter" in life. Your finances must support your retirement vision, so there are no surprises when it's your turn.
As a Spokane financial advisor, I've seen that it is never too late to change your retirement path. If you don't know where you are going, chances are you will end up somewhere else. Social security most likely won't be enough to cover all of your baseline living expenses, and that is why it is critical that you proactively save to supplement your social security. Also, know the most significant threat you face in your retirement is the rising cost due to inflation. Having different buckets of savings and creating various income sources can help you navigate the changes ahead as you age.
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Let us know if there's a change in your retirement dream. We'd welcome the chance to hear what prompted the difference, and we'll be sure to make any needed adjustments in your financial strategy.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
All investing involves risk including loss of principal. No strategy assures success or protects against loss.
1 - Employee Benefit Research Institute, 2021 Retirement Confidence Survey