Over the last few days, National Public Radio (NPR) has been presenting the findings of an in-depth survey and study of how recent retirees and soon-to-be retirees (those over 50) view retirement. The report was conducted by NPR, the Robert Woods Johnson Foundation and the Harvard School of Public Health.
The findings show a general optimism about retirement, though that general optimism is dampened by the credit crisis of the last three years. Yet that optimism is strongest among those who have not yet actually retired. Among the retirees themselves, optimism has been checked by the harsh realities of decimated IRAs, a credit crunch, and unexpected health issues.
What seems to be the state of retirement in the new millennium? The issue may be not that the state of retirement is so bad, but that expectations are strikingly high.
The audio from NPR giving the overall conclusions can be heard here:
Perhaps the two most striking overall statistics are that a quarter of all retirees believe their overall quality of life has gone down, whereas only about 14% of Americans over 50 polled believe that their lives’ quality will slip. Almost the same amount of retirees report feeling greater stress or the same amount of stress after retirement than they had before. Only 9% of pre-retirees believe they will have similar levels of stress after they retire.
Besides the fact that about double the number of soon-to-be retirees are in for a rude shock, those who have retired largely blame economic problems for the added stress – and many of those problems were not created directly by the banking and investment collapse of 2008. Here is part of Wanda George’s story on NPR:
“I didn’t give it a lot of thought, to be very honest with you,” says Wanda George, who took part in the poll. She’s 71 and has been retired since a car accident forced her to go on disability at age 59. After raising four kids, George managed a beauty salon and did have a 401(k). She says it seemed to be doing pretty well. But after she stopped working, she had to tap into that money to pay for health insurance. She says her late husband didn’t put much away for retirement, so she’s now getting by only on Social Security.
“I had a really nice home,” George says. “I couldn’t afford that. Even going out to eat, it’s no longer the nicer places. You go to the cheaper places. Clothing, when you buy it you have to wait for sales, which is OK, but you just do not have much of a choice.”
And as the report demonstrates, soon-to-be retirees are aware of the economic pressures of retirement. Current recipients of Social Security retired about when they expected, and often before 65. But a significant minority of those in their 50s are already preparing themselves to put off retirement by three to ten years – mostly to avoid the trap people like Ms. George finds herself in.
The executive summary of the report can be found here. Next Tuesday we shall present the reports findings on perceptions of health, health-care costs, and how perceptions of health might be undermining people’s abilities to retire with the comfort they imagine.