How Many Retirees Are Actually ‘Living a Nightmare’?

A recent headline fans the flame of retirement panic—but just take a look at the actual data.

The source of the data was Schroders’ 2024 U.S. Retirement Survey , which did actually find some retirees characterizing their existence that way (doubtless with the help of a creative survey drafter) —some, in this case being (wait for it)—4%. That’s right, just 4%, which, coincidentally enough happened to match the number that said they were “living the dream”—though how many people would have clicked on THAT headline?[i]

Indeed, while there was plenty of concern expressed by the survey of 2,000 U.S. investors ages 28 to 79, including 498 retired Americans, those in retirement seemed to be in pretty good shape.? Nearly half (44%) described their circumstances as “comfortable,” another third (34%) said it was “not great but not bad,” while 15% said they were “struggling.” Said another way, 80% seemed to be in pretty good shape. Funny how nobody leads with that. And yet, even the survey’s sponsors chose to invoke the notion of a retirement savings “crisis.” Really?

Now, we don’t know much about the survey respondents—no idea where they are living, how old they are (and thus how close to retirement), what their current income is, or whether or not they have access to a retirement plan at work. What we do know is that they’re worried about the future, notably the impact of inflation and/or medical expenses in the future. They’re also (apparently) worried about:

• A major market downturn significantly reducing assets (76%)
• Not knowing how to best generate income and/or draw down assets (69%)
• Outliving assets (68%)

While we don’t much about the individual circumstances involved, more than 4 in 10 survey respondents believe they have saved enough, though 24% are unsure, and 32% are convinced (though we don’t know if it’s founded on an actual needs assessment) they have not accumulated enough savings. Feeding those concerns was a finding that nearly half (47%) of all retirees report their expenses in retirement are higher than they expected (so have the “more than half” not been surprised?), while 49% believed Medicare would cover more of their healthcare expenses (a sentiment that lots of working Americans could likely embrace with regard to their own health coverage).

Indeed, the headlines all pointed to inflation as “taking a toll” on retirees, but it seemed more accurate to say that inflation is taking that toll not on the reality of retirement, but on their confidence in their retirement planning. No doubt the future is an uncertain place, and surely none feel that more intensely than those living on what is generally referred to as a “fixed” income.?

However, that likely means we don’t so much have a retirement crisis as a crisis of confidence about the future generally, and retirement specifically. And some—perhaps most—of that can surely be laid at the feet of headlines that fan those fears and fuel the enmity of those who want to do away with the current system—even when it seems to be working pretty well for so many.??

?

[i] In fairness, Schroder’s report of the survey did NOT lead with that headline, which is here .?