Experience is the mother of knowledge, the saying goes. In that case, a great way…
The Baby Boomers, typically those born between 1946 and 1964, are one of the largest population groups in U.S. history. They’ve influenced the American economy and culture for decades. Now that the first wave of them are entering retirement, what are their experiences?
American Financial’s Retirement Triggers study surveyed 1,000 newly retired Baby Boomers ages 60-73 with at least $100,000 in investable assets. The good news is that the majority of retirees (75%) said they were “very satisfied” with their lifestyle in retirement, and an equal number reported spending their new free time doing what they planned to do in retirement. Here are some other major findings from the survey.
1. Choosing a retirement date can be a tough decision. Like any major life change, retiring can involve a lot of uncertainty and stress. Less than half of respondents (47%) reported feeling ready for retirement and 63% said they felt stressed as the big day approached. Nevertheless, 98% feel satisfied, looking back, with their decision to retire when they did. Only 31% would change their retirement date if they could.
2. Financial planning for retirement is crucial. The respondents reported that financial considerations had a huge role in their decision to retire: 94% say it was extremely or somewhat important to be financially confident about retirement before making the jump. Almost one-third (29%) said they would have saved more money before retiring, if they had to do it all over again.
Nevertheless, money worries were not a great source of stress for most respondents: 94% were very satisfied or somewhat satisfied with their financial situation in retirement. The fact that the majority (70%) of them receive a pension may help with that. Only 11% of respondents are continuing to work in any capacity in retirement, and most of those are doing it for “intellectual stimulation” or for the “interesting opportunity” rather than for the income.
3. Psychological planning is equally important. The majority of respondents (69%) reported some emotional adjustment associated with retirement. The hardest aspects of retirement cited by respondents were losing connections with others (37%), getting into a different routine (32%) or finding purposeful ways to pass the time (22%).
Once they made the adjustment, however, things appear to be going well, at least initially: 65 percent of respondents say they got into a new routine fairly quickly, and nearly half (43%) said they were having more fun than they expected. Additionally, over half (52%) said they had less free time than they thought they would before retiring.
4. Communication is important. Respondents reported consulting with financial advisors before retiring. Many had advisors available through their employers’ 401(k) plans; the others consulted private advisors, and this advice had a role in some respondents’ decision to retire. Retirees also researched the Social Security and Medicare websites and other online resources.
Communication by couples also matters. The study found that 80% of respondents had discussed their retirement plans with their spouse, and 37% reported their spouse was the most influential factor in their decision to retire. Financial experts advise, however, that even if both spouses are retired, it’s important for each to keep some aspects of their own lives and identities intact. Just because both are now free doesn’t mean they have to be together all the time.