EDITOR’S NOTE: Sept 10, 2015 — We did a new and different survey on this topic last week. Here is a link to the Summary of Results from that article: “Maintaining Pre-Retirement Lifestyle a Challenge for Many“.
September 15, 2014 — Thanks to the over 800 members who took the time to contribute their valuable insights to last week’s “Retirement Confidence” poll. We appreciate that so many of you are community minded enough to share your opinions and attitudes! As promised, here is a detailed report on the findings. At the end of this article you will also find a link to a document with more than 225 individual responses to question 12, “Do you have anything else you would like to tell us about your retirement confidence, or the other questions on this survey”? See a list of our previous survey reports at the end of the article.
It is always interesting to find out exactly how our members feel about various retirement issues. This survey was mostly about retirement confidence, with specific questions about your financial situation and various medical topics. Here are some other highlights from the 12 question poll; detailed findings for each question are listed below that:
– About half of the survey respondents are still working, with the balance retired and a few partially retired
– Almost 2/3 of the respondents were between ages 60 and 69
– You are feeling quite confident about your ability to maintain your current, pre-retirement standard of living. In fact, more people are more confident about their retirement than they were 5 years ago
– We were pleasantly surprised at the number of our members with substantial retirement assets. When asked about the size of financial assets (not including home or pension), the most frequently chosen answer was over $1 million, far above the average near-retirement age population
– By far most people believe that living near good medical facilities is at least slightly important
– Most people do not have money set aside specifically for medical expenses
– Long term care insurance is apparently not for everyone – only a quarter of respondents have it
– The major sources of retirement income will be from social security, IRA/401(k), pensions, and savings
– The most important single source of income is expected to bring in between 51% and 75% of their retirement income.
Our conclusion from reading the comments of the people who took the time to share their thoughts reveal a lot of common sense, confidence, optimism, and confidence. You should read them (see link below) to get a better idea. We have many favorite comments, but here is one we particularly like: “Starting out in retirement reminds me of the day I left home for college. I had an idea of what it would be like, but it ended up being so much better than what I envisioned — I hope retirement goes like that also.”
1. Retirement Status
About half of our members and visitors are not retired – 49% not retired vs. 42% who are. Another 9% are partially retired.
2. Retirement Age
More Topretirements members are between the ages of 60 and 69 (62%) than any other age. Those between 50 and 59% were next (30%). Just 7% are 70 and over, and almost no one is under 50.
3. Will you be able to maintain your current standard of living in retirement?
Happily, the Topretirements membership is feeling really confident about their ability to keep their current standard of living.
Not at all confident
Slightly not confident
4. Confidence vs. 5 years ago
We asked to compare your confidence to live a happy and successful retirement as it is now to 5 years ago, when we were in the depths of a recession. Not surprisingly, more people are feeling better now.
Slightly more confident
About the same
Much less confident
5. Retirement assets
Almost everyone who took this confidential survey was kind enough to report the level of their retirement assets (IRA’s/401(k)s, savings, etc – but not counting the value of the home they live in or pensions). The results were surprising – more respondents have more than $1 million saved up than any other category. By contrast, a 2013 study from the Federal Reserve found that for working households nearing retirement, median combined 401(k)/IRA balances were $111,000 in 2013.
To the fortunate souls with these above average assets we say. nice going. We congratulate your good fortune and hope you enjoy it. For those less fortunate – keep working and saving if you can! We hope things turn out better than expected.
Over $1 million
$500,000 – $999,999
$250,000 – $499,999
$100,000 – $249,999
6. Funds earmarked for medical expenses
The question was, “Do you have funds earmarked for medical expenses, or do you plan to pay for such costs out of cash flow?” As you can see from below, most people are taking a wait and see attitude. Only 28% have such earmarked funds, while 49% expect to pay out of pocket. Another 9% aren’t sure, while 5% don’t funds for anything. There were over 250 comments on this question which are worth reading; here is a link to confidence-healthcare.
7. How important is it that you live near good medical facilities?
This is kind of an obvious question, but we wanted to see if our assumption was correct. It was, almost half of respondents (46%) think that is very important, with another 39% saying it is slightly important. Only 15% were neutral, slightly unimportant, or not at all important. Our recommendation to those who think it is unimportant or even slightly unimportant – reconsider that opinion, unless you plan a 2 stage retirement. If we are lucky enough to live a long life, chances are we going to require some medical pit stops.
8. Long term care insurance
Once again this answer is not too surprising. Most folks hope they won’t need it and don’t plan on buying long term care insurance. Hope is the operative word here, as only 18% have set aside money to self insure for any eventual long term care needs such as a nursing home or assisted living. Here are the stats:
Hoping I don’t need it: Don’t plan on it
Have a policy
Will self insure/have money set aside
Considering buying a policy
9. Sources of retirement income
More than half of respondents to the survey expect to get retirement income from all of these sources: Social Security (almost everybody expects income from this source), IRA/401(k)s, Savings/Investments, and Pensions. What we found very surprising here was the high number of people who are entitled to pension income – 69%! That high percentage makes us think that either Topretirements members are atypical, or maybe the older baby boomers who make up most of our audience are the last wave of people who are entitled to pensions, which seem to be a dying phenomenon. (Note: %’s add up to more than 100% because people have multiple sources of income).
There were a number of interesting comments that at least partially explain the “Other” sources of income. Those included settlements from estates, other investments, annuities, deferred income, rental property, and part time employment. Our favorite “other” source mentioned: a “Sugar-Daddy”.
10. Most important source of income
The answers to this question were parallel to those in question 9: Social Security, IRA/401(k), Pension, and Savings topped the list as most important. Note that the numbers in the 2nd column are a Rank (the lower the number the higher the rank).
11. How much will your primary source provide of your total retirement income?
We asked folks in this question to choose from a range that described how much of their total income they would get from their primary source of retirement income. In our opinion, the folks who were generally the best off were those who will receive income from a variety of more or less equal sources. The most frequently chosen range was 51-75%. Remember from question 10, Social Security was ranked the #1 source by the most people. So, taking a midpoint level of 67.5%, and then applying the average 2014 Social Security retirement benefit to a couple where both receive benefits ($25,332), we interpret from this that most people in this survey will have a yearly retirement income of $37,528. This conclusion assumes that most people knew what their SS benefit would be when we asked the question – but that might not be the case.
(How to interpret this: e.g. 46% of the respondents expect to get 51-75% of their total retirement income from their primary source)
75% or more
Less than 25%
12. What else would you like to tell us about your retirement confidence and/or the questions in this survey?
There were 225 responses to this open-ended question – thank you for your insights! The comments are extremely diverse, and interesting. Some mentioned how they had planned and saved to get to a comfortable position. Many are concerned and nervous about how their retirements will actually shake out. Health issues and the sudden changes that can happen in life were a concern to many. Others are concerned about the political landscape. We urge you to spend a few minutes looking over the comments (retirement-confidence-2014-excel) (retirementconfidence-PDF) – particularly if you are early in or not yet in retirement, while there is time to react! Note that you might have to zoom in to read easily, and longer comments are often cut off.
Thank you to those Topretirements members who took the time to share. If you didn’t fill out the survey, say thanks to those who did so for your benefit. As always, your insights are wonderful and illuminating. Please share your reactions in the Comments section below!
Links to Previous Surveys
Where to Retire Preferences
Topretirements Members Report High Degrees of Spousal Compatibility- 2013
Our Members Getting Ready for Big Retirement Moves- 2013
Retirement Living Preferences – 2013
Medicare Survey – 2012
Best and Worst Things About Your Retirement
Your Bucket Lists Are Amazing
Top Concerns about Retirement
Plans for Retirement
Comments? Please share your thoughts in the Comments section below. Were you surprised about the average size of the portfolios? Any thoughts about the medical questions? Any other thoughts?