On January 17, 2018, the Society of Actuaries (SOA) released its biennial report, 2017 Risks and Process of Retirement Survey. The report examines: 1) the extent to which pre-retired and retired American’s ages 45-80 are aware of their financial risks in retirement; 2) how that awareness affects how they manage their finances; and 3) how they manage the process of retirement. The survey was conducted by Mathew Greenwald & Associates, and is the ninth in the SOA’s series.
Some of the key findings include:
- Pre-retirees and retirees tend to underestimate average life expectancy. In general, both groups expect to live to age 85.
- About 60% of pre-retirees expect to work longer; however, only 11% of retirees reported working longer.
- About 52% of pre-retirees expect to postpone taking Social Security; however, only 14% of retirees reported having done so.
- Most retirees have experienced at least one major financial shock in retirement (e.g., major repairs, medical or dental expenses, etc.). About 33% of retirees feel unprepared to handle significant out-of-pocket medical expenses, 35% feel unprepared to manage a 25% decline in their home value, and 47% feel unprepared to handle depleted assets in retirement.
- Pre-retirees expect to retire at a median age of 65, while retirees report having retired at a median age of 60.
- For pre-retirees and retirees who plan to work longer, the major reasons include: not having enough money; wanting to build their assets; and keeping employer-provided health benefits.
Households with lower incomes tend to be more concerned about most of the retirement risks. Lower income retirees who have experienced shocks are more likely to have reduced assets and spending as a result.
The report is available here.