More than two-thirds (70%) of American retirees wished they had saved more and planned earlier for retirement, according to the 2022 Retiree Reflections Survey, published recently by the Employee Benefit Research Institute (EBRI).
The survey, which included responses from 1,109 retirees between the ages of 55 and 80 and a minimum of $50,000 in retirement assets, sought to understand use of financial plans, financial advisor use and assistance, priorities in retirement, spending concerns in retirement, financial worries pre-retirement and post-retirement and reflections upon past financial decisions.
Some of the key findings include:
- Retirees seem to fare better when they have an advisor. Specifically, retirees with a plan and/or advisor were less likely to have financial regret, when measured as the desire to change past financial habits in order to improve their current financial situation.
- Approximately 9 in 10 retirees who used a financial advice professional to create a financial plan were satisfied with their financial professional and felt the value they received from using an advisor outweighed the cost. [Note: High satisfaction rates may in part be due to sample selection as well as advisory relationship survivorship.]
- Relative to the transition to retirement, retirees who worked with an advisor on their financial plan reported that the primary benefits were asset-allocation-related, including assistance in identifying their risk tolerance and help understanding how to turn their retirement savings into an income stream.
- Few retirees (25 percent) reported that their former employer offered financial planning assistance, potentially reflecting a timing difference (the benefits were offered after their employment tenure) or an awareness gap, revealing a need for improved communication.
- Many retirees don’t have a formal financial plan for retirement. Only 4 in 10 (42 percent) retirees surveyed had both identified financial goals in retirement and developed a written financial plan. Retirees report various reasons for not identifying financial goals in retirement, including lack of knowledge, admitted procrastination, and unexpected events that were competing priorities.
- While not saving enough for retirement, unexpected medical expenses, and preventative health expenses were the top financial concerns preretirement, inflation is the most frequently cited financial concern during retirement, identified by more than half (54 percent) of current retirees. In addition, approximately 1 in 3 retirees remain concerned about health- or medical-related expenses, running out of money, and market volatility.