A majority of both workers and retirees are confident about living a comfortable life in retirement, according to the 2022 Retirement Confidence Survey by the Employee Benefit Research Institute. That said, a third of workers and almost a quarter of retirees say the pandemic has made them feel less confident in their retirement prospects.
This is the 32nd year of the RCS, which is conducted with Greenwald Research. This year it surveyed 1,132 retirees and 1,545 workers, age 25 and older. Data was weighted by age, sex, household income, race/ethnicity and LGBTQ status.
Similar to last year's findings, 7 in 10 workers were at least somewhat confident — including 3 in 10 who were very confident — that they will live comfortably in retirement. A large majority of retirees — 8 in 10 — also stated that they had enough money to live comfortably.
Plans vs. Realities
The survey also found that half of workers plan to retire at age 65 or later, while current retirees left the workforce at a median age of 62. Also, workers expect a gradual transition into retirement to help pay for it. But that doesn't match the experience of most retirees, the report states.
While 44% of workers expect to gradually transition to retirement, only 17% of retirees state that happened for them. Instead, 73% said their retirement was a full-time stop.
While 70% of workers think they will continue to do some kind of work for pay in retirement, only 27% of retirees report doing so, the report states. Similarly, while 68% of workers expected work in retirement to be a source of retirement income, only 22% of retirees said that was the case.
Also, 47% of retirees stated they retired earlier than expected. Of these, 4 in 10 stated they did so because they could afford to; however, the majority said early retirement was due to reasons outside their control, such as health problems or company downsizing.
Other Findings
Similar to last year, 53% of retirees stated their lifestyle in retirement was about the same as they expected. Twenty-six percent, down from 28% last year, said it was better than expected, while 17% said it was worse than expected.
However, 36% of retirees say their overall spending and expenses were higher than expected, which is up from 26% in 2021. The main expense culprits were housing, which 29% of retirees (up from 24% in 2021) and travel and leisure, in which 23% of retirees (up from 17%) stated were higher than expected.
While 75% of retirees and 66% of workers are confident they will have enough money to take care of medical expenses, retirees state health and longer-term care is a top financial priority. Indeed, 2 in 5 retirees stated their health and dental expenses were higher than expected, similar to last year. When applicable, the report states, 1 in 5 retirees said long-term care expenses were higher than expected.
