Most retirees find retirement doesn't live up to their expectations

After saving decades for their golden years, it turns out that retirement isn’t at all what people expected, according to a recent survey, with seniors wrestling with spending worries, forced retirement, and an identity crisis.

“We expect retirement is going to be one thing and then when you actually get into retirement, as your priorities have changed, you're not as excited about doing things that you thought you were going to be excited about,” said Lori Lucas, president and CEO of Employee Benefit Research Institute.

Fewer than 1 in 4 Americans think their current retirement lifestyle aligns with what they planned for their retirement to be, according to EBRI’s survey of 2,000 retirees from ages 62 to 75 conducted online in September.

'Sudden fear and uncertainty about preparation'

Fewer than 1 in 4 Americans think their current retirement lifestyle aligns with what they planned for their retirement to be, according to EBRI’s online survey of 2,000 retirees from ages 62 to 75 conducted in September 2020. (Photo: Getty)
Photo: Getty Creative (shapecharge via Getty Images)

For instance, pre-retirement dreams of travel take a back seat as retirees’ focus recenters once people hit their third act. The leading priority is maintaining their health and wellness with 81% of retirees citing this, followed by quality time spent with family and friends at 68%. Traveling takes a distant third with less than half reporting it as a top goal.


“You're more excited about the quality of your relationships, and things that are not going to cost as much as we thought they were going to cost,” Lucas said, noting retirees often struggle with the shift from a lifetime of saving to finally reaching the stage where they can spend freely.

Read more: Here's how to get your retirement savings back on track

“Retirement is something people have worked for for their whole life and they prepare for it, but often leading into retirement there's this sudden fear and uncertainty about preparation,” Rob Williams, vice president of financial planning at Charles Schwab, told Yahoo Money. Retirees wonder if they have enough money and what’s a reasonable amount to live on, he said.

For instance, nearly 6 in 10 of respondents wanted to spend down only a small portion of assets, spend none at all, or grow their assets.

“They just want to have that nest egg in case anything happens,” as Lucas put it.

'Retirement could come much sooner than they anticipate'

Group of seniors adults with Yoga Instructor. Instructor is helping senior woman with a yoga pose. Horizontal shot.
Photo: Getty Creative (Thomas_EyeDesign via Getty Images)

A forced retirement also upends plans to continue working and ability to save — and it’s a common occurrence. EBRI found in a separate study that almost half of workers retire before they planned to. Be it layoffs, health issues, or other reasons, the timeline disconnect is a costly mistake for people who thought work was guaranteed.

“Retirement doesn't always happen as we picture it,” said Stein Olavsrud, a certified financial planner and executive vice president at FBB Capital Partners. “Somebody going into their early 60s should be fully prepared that retirement could come at any time and it could come much sooner than they anticipate.”

Read more: Expert: Retirement investors should embrace uncertainty as their new normal

Retirement — whether forced early or not — can also trigger an “identity crisis” when transitioning out of a career, said James Ciprich, certified financial planner and wealth advisor with RegentAtlantic Capital. Take, for example, how people introduce themselves by mentioning what they do for a living when meeting others for the first time.

If somebody says, ‘I'm retired,’ then that answer is, ‘oh, what did you do when you were working?’ and it almost makes it seem like a less important existence,” said Ciprich, who suggests exploring how you’ll spend your time.

'More of a phased retirement'

Confident senior woman working in workshop
Photo: Getty Creative (PIKSEL via Getty Images)

“You want to have things that fill your time with meaningful activities to give yourself that sense of purpose that you might lose,” he said.

Others may instead want to do a slow fade into retirement, replacing the old-guard cliche of being gifted a gold watch at a big retirement bash. Options for a phased retirement include consulting, professional mentorships, or working part-time to provide a happy medium of time to pursue passions and hobbies outside of work while still earning an income.

Read more: Study: Retirees more than doubled their debt in 2020

“Making that transition to part-time work is much more common than it used to be,” Williams said. Modern retirement is “more of a phased retirement where you might be working full-time and not in an executive position or something, if you're fortunate.”

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Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @SJAsymkos.

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