Not all is doom and gloom for those approaching retirement, according to research conducted by Greenwald & Associates on behalf of MassMutual. While pre-retirees often fear that they will face financial uncertainty and boredom in retirement, retirees feel rather positive about their experience.
In fact, six in ten retirees are very satisfied with their lifestyle in retirement. Most retirees – more than 7 in 10 – also say they are enjoying themselves, have more free time, and are able to afford a comfortable lifestyle. Compared with their counterparts who are still in the workforce, retirees tend to be happier, more relaxed, and less stressed.
The research, which included focus groups and a survey of over 1,800 pre-retiree and retiree respondents who were within 15 years on either side of retirement, also found that pre-retirees’ hopes for retirement were sometimes inflated as well. Pre-retirees imagine having more new experiences and opportunities opened up in retirement and see retirement as exciting and relatively stress-free. Although this is true for many retirees, the stresses of life don’t completely disappear and only about half find new opportunities available to them.
Adaptability: Despite some unrealistic expectations among pre-retirees, the story remains a positive one for retirees. This is reinforced by the fact that retirees have a great ability to adapt to changing circumstances. As individuals progress through retirement, they indicate greater satisfaction, financial security, and ability to manage their spending. Likewise, concerns about retirement lessen as pre-retirees get closer to their expected retirement date.
Lessons Learned: The greatest value of this research comes from the insights of the happiest and most financially secure retirees, whose successful planning and preparations can be seen as roadmap to those approaching retirement.
The key takeaway is that individuals need to start planning as early as possible for their financial and emotional well-being in retirement, especially given that nearly half retire earlier than expected. This study finds that pre-retirees have only vague notions of what their retirement years may look like, which creates fear and anxiety that may lead to planning procrastination. It is a good idea for pre-retirees to spend some time thinking about what type of life they want in retirement. Once pre-retirees have a clearer picture of their retirement years, they may be more motivated to take steps to help achieve their retirement goals.
The earlier people begin to take these steps, the better – and this is particularly true for financial preparations. Those who took financial steps such as calculating the best time to begin collecting Social Security, identifying a target for how much money they need to retire, and increasing savings accordingly report more financial security in retirement. Yet, financial security is not the only aspect one needs to prepare for prior to retiring. This study finds that nurturing one’s relationships– such as strengthening the relationship with one’s spouse and reconnecting with old friends and making new friends – is associated with greater enjoyment in retirement.
For more information, read the full report on MassMutual’s site.
COMMENT: How do you think today’s retirees are doing? Are pre-retirees too worried about retirement?