September 9, 2015 — Have you been wondering how your retirement income stacks up to that of other retired people in your situation. Or whether it will be enough to provide your pre-retirement lifestyle? Well, thanks to the almost 1500 community-minded members who took the time to contribute their valuable data and insights to last week’s “How Much Do You Expect to Receive in Retirement” survey, now you will know. If you didn’t complete it you owe these folks a big thank you.
As promised, here is a detailed report on what the survey turned up. It includes links to hundreds of individual comments to various questions on the survey. Those include the one about your retirement budget preparations, and how confident you are that the income level you EXPECT to receive will be enough to maintain your pre-retirement standard of living. You will find a list of our previous survey reports at the end of the article.
This is the first time we have asked you for data about your retirement income expectations, and how that agrees with what you think you will need. We were also intrigued with the question about whether you intend to move out of state, and if finances are related to that decision. Here are the highlights from the 11 question poll; detailed findings for each question are listed below that.
We have come to expect that in general, Topretirements members are both better prepared for retirement, and more willing to move than the population at large. Those expectations were confirmed in this survey. What was a bit unexpected was the fairly high monthly income that a significant percentage of you report (see below). A disturbing finding from the survey is that about half of the people taking it expect that their retirement income will come up short when it comes to providing their pre-retirement lifestyle.
– Retirement budget preparation. Slightly more than half (55%) of you have completed a retirement budget. The remainder is evenly split between “working on it” and “haven’t”.
– Moving plans. Three quarters of our survey takers have moved or plan to, or are considering it. A third of those folks are planning to move because of money.
– Where to. By far the most popular place to live or move to is the Southeast, followed by the Northeast, Southwest, and Midwest.
– Retirement Income. We were surprised at the fairly high level of expected pre-tax income – more people specified that they would be receiving over $7000 a month (25%) than any other choice. The next most popular decile was $4000 to $5000 (18%).
– Expected income vs. need. It was unsatisfying to see that less than half of survey respondents (46%) say that their expected retirement income will allow them to continue their pre-retirement lifestyles. Another 19% report that they would need another $1000 a month to keep up, with the remainder expecting more of a shortfall.
– Retirement assets. Topretirements members, or at least those filling out the survey, have substantial retirement assets. When asked about the size of financial assets (not including home or pension), the most frequently chosen answer (33%) was over $1 million, far above what the average near-retirement age population has in its accounts.
– Source of income. The major sources of retirement income will be from social security, IRA/401(k), pensions, and savings
We also asked qualifying questions 1 and 2 in a survey we ran last year. It is reassuring that this year’s results are within a few percentage points.
1. Retirement Status
About half of our members and visitors are not retired – 47% not retired vs. 43% who are. Another 10% are partially retired.
2. Retirement Age
More Topretirements members are between the ages of 60 and 69 (63%) than any other age. Those between 50 and 59% were next (27%). Just 9% are 70 and over, and almost no one is under 50 or over 80.
3. Have you prepared a budget showing your retirement income and expenses?
We are pleased to see that for the most part,Topretirements’ members have taken the effort to complete a financial budget for their retirement. Many others are in the process (keep at it!). Here is a link to all 292 comments about budget process.
Am working on it
It is hard to summarize so many interesting comments – you really have to look at them to see the trials, challenges, and concerns people have about preparing a retirement budget. But here are 2 sample comments to give you a flavor:
– What I learned was that it was easy to spend money on unnecessary items when the income was salary based with an expected continuation but very difficult to curb those spending habits once the income not only reduced, but became fixed. Setting up a budget let us see exactly where the money was going every month and helped us recognize and begin to control the bad habits we had been practicing.
– Our original plan was based on spouse, eight years younger than I, to be employed and carrying health insurance. I did not figure for her not going on in her career. Health care is a HUGE expense to work into any future plan.
4. What area do you live in or are you considering moving to?
The Southeast is the most popular place for retirement in the country. Yet when we looked at the 970 responses from people saying specifically where they want to retire, you cannot imagine the diversity. People are retiring everywhere, all over the U.S. and the world. And many people are choosing to live in 2 places.
We assume that the Southeast is the most popular region because of its generally lower cost of living and warmer winters. The idea for this question came from a member, who made the good point that cost of living varies significantly in different regions of the country.
5. Are you planning on moving to help make your retirement income go further. Or if you are already retired, have you moved or are you considering it?
About 3/4 of those filling out the survey are moving or considering moving. As you can see, some people move to save money, but that is clearly only one of the reasons why people move.
Am considering moving
Will move- not money reason
Will move because of money
6. How much do you EXPECT to receive in pre-tax retirement income each MONTH? Or, if you are retired now, how much are you getting each month?
We were surprised by the percentage (25%) of survey takers who expect the highest monthly income level option in the survey – $7000/month or more. The next highest level was $5000-$6000/month. About one third (31%) expect to receive less than $4000/month, or $48,000 per year. This would suggest that the majority of Topretirements members are fairly comfortable, although there are still many with fairly low retirement incomes. About 250 (slightly less than 20%) of those who responded to this question 5 said they were single.
More than $7000/month
$4000 – $5000
$3000 – $4000
$5000 – $6000
$6000 – $7000
$2000 – $3000
Less than $2000
7. Expected retirement income vs. what you will need.
You report a sobering picture from this question. Just under half (46%) of you report that you will either have enough or more than enough income to maintain your living standard. A total of 32% of respondents think they will have a shortfall of up to $2000 a month
Will have enough
$0 to $1000/mo.
$1000 – $2000/mo.
Need more than $3000
$2000 – $3000
8. Will you be able to maintain your current standard of living in retirement?
Happily, the Topretirements membership is feeling some level of confidence about their ability to keep their current standard of living – over 2/3 or respondents are slightly or very confident. What is interesting here is a change in the ranking from when we asked the same question a year ago. Then the most common answer was “very confident”, this year the most popular was “slightly confident”. If that change might suggest a lowering of confidence in 2015, countering it was the ranking for “not at all confident”, which slipped 2 places to be the least frequent characterization this year.
In the comments to this section many of the people who are confident share some of there secrets of success. Others are not sure what the future holds in a complex world. Here is where you can see comments about confidence of maintaining standard of living.
Slightly not confident
Not at all confident
9. Total retirement savings/investments from all sources (IRAs, 401(k)s, general savings/investments, etc., but not including value of home or present value of pension).
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. 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.
We congratulate our members who enjoy this good fortune. 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
10. Most important source of income
As it is for most people, Social Security will be the primary source of retirement income for Topretirements’ members. IRA/401(k), Pension, and Savings rank below that as the most important. People who have pensions tended to rank that as their most important source of income. The numbers in the 2nd column are a Rank (the lower the number the higher the rank).
11. What else would you like to tell us about your retirement confidence and/or the questions in this survey?
There were 280 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. A significant number appear to be deeply concerned about the political landscape. Here is a link where you can download all Comments to Q 11- Income Survey. (You might have to use Zoom to make it readable).
Thank you to those Topretirements members who took the time to share.
Links to Previous Surveys
Good News: Topretirements Members Very Confident About Retirement
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 expected monthly incomes? Any other surprises or reactions – please let us know!