focus on retirees retirement savings and spending 4 ... · representative national study of 3,005...

RETIREMENT SAVINGS AND SPENDING 4: BEHAVIORS AND ATTITUDES TOWARD RETIREMENT

T. Rowe PriceFebruary 5, 2019

Focus on retirees

2

Methodology

Financial Objectives of Retirees

Attitudes of Retirees

Concerns of Retirees

Financial Practices: Retirees vs. Workers

Table of Contents

3

Methodology Representative national study of 3,005 adults 21+ never retired, currently

contributing to a 401(k) plan, or eligible to contribute and have a balance of $1,000+

Also includes 1,005 adults who have retired with a rollover IRA or left-in-plan 401(k) balance

Conducted online July 24 through Aug. 14, 2018

Worker design included oversamples that were then weighted back to naturally occurring proportions:

WorkersActual N =

Actual Proportion

WeightedProportion

Millennial (21-37) 1,251 42% 36%

Generation X (38-53) 503 17% 39%

Baby Boomer (54 or older) 1,251 42% 26%

Total 3,005 100% 100%

FINANCIAL OBJECTIVES OF RETIREES

5

RSS4 © 2018 NMG Consulting. All rights reservedConducted for T. Rowe Price by NMG Consulting

For each financial objective below please indicate how important it is to your household.

As of 2018. Major objective, Base: (1) have children <18 or adult children, (2) have debt other than student loans

Importance of Financial ObjectivesBy years since retirement

Q. 21

82%

75%

41%

34%

31%

81%

76%

47%

35%

39%

85%

77%

41%

31%

32%

81%

74%

37%

37%

24%

Overall, having financial peace of mind

Maintaining an acceptable quality of life

Managing and budgeting for day-to-dayexpenses

Reducing what you owe on other types of debtsuch as credit cards, home equity lines of credit

etc. (2)

Managing a plan to convert your retirementassets into a stream of income for your

retirement

Total retirees 1-5 years 6-10 years 11+ years

6


For each financial objective below please indicate how important it is to your household.

As of 2018. Major objective, Base: (1) have children <18 or adult children, (2) have debt other than student loans

Importance of Financial ObjectivesBy years since retirement

Q. 21

25%

20%

10%

3%

30%

16%

6%

4%

25%

19%

10%

5%

20%

25%

13%

2%

Saving to fund health care expenses inretirement

Leaving money for your heirs

Contributing to charities or other not-for-profitorganizations

Saving for college or other educational expensefor any members of your household or

grandchildren you may have (1)


ATTITUDES OF RETIREES

8


How much do you agree or disagree with the following statements? As of 2018. Base: total interviews

Retirement ExperienceBy retirees

Q. 92

62%

5%

4%

23%

11%

16%

10%

43%

46%

4%

41%

34%

My retirement has turned out to be worsethan I expected

So far, my retirement has turned out to bejust as good or better than I expected

I am enjoying my retirement years morethan my primary working years

Disagree completely Disagree somewhat Agree somewhat Agree completely

9


How much do you agree or disagree with the following statements?

As of 2018. "Agree completely." Base: total interviews

Retirement ExperienceBy years since retirement

Q. 92

34%

41%

4%

38%

38%

6%

34%

36%

4%

31%

45%

4%

I am enjoying my retirement years more than myprimary working years

So far, my retirement has turned out to be just asgood or better than I expected

My retirement has turned out to be worse than Iexpected


10


As of 2018. Base: total interviews

Retirement Experience

Q. 50

Given your savings, income and expenditures, which of the following statements are true of your retirement?

77%

69%

59%

27%

20%

16%

9%

I have enough money to pay for health care

I live as well or better as I did when I was working

I will be able to leave money to family members orcharities

I will be able to help out younger family memberswith tuition or housing expenses

I will have to reduce my standard of living

I will work at least part time in retirement

I will run out of money

By retirees

11


Given your savings, income and expenditures, which of the following statements are true of your retirement?


Retirement ExperienceBy years since retirement

Q. 50

77%

69%

59%

27%

20%

16%

9%

71%

67%

53%

25%

23%

23%

9%

76%

65%

54%

25%

21%

15%

7%

81%

72%

66%

28%

18%

11%

10%

I have enough money to pay for health care

I live as well or better as I did when I was working

I will be able to leave money to family members or charities

I will be able to help out younger family members with tuition orhousing expenses

I will have to reduce my standard of living

I will work at least part time in retirement

I will run out of money


12



Retirement ExpectationsBy total workers

Q. 49

Given the retirement savings you have in place right now and the rate at which you may be adding to those savings, which of the statements below do you expect will be true for you in retirement? Please select all that apply.

52%

46%

41%

39%

32%

25%

25%

You will work at least part time in retirement

You will have enough money to pay for health care

You will have to reduce your standard of living

You will live as well or better as you did when youwere working

You will be able to leave money to family membersor charities

You will run out of money

You will be able to help out younger family memberswith tuition or housing expenses

CONCERNS OF RETIREES

14


How concerned were you about the following in the years leading up to your retirement? …and how concerned are you about these now?

As of 2018. "Very or somewhat concerned." Base: total interviews

Retirement Concerns

Q. 89, 90

69%

68%

65%

57%

51%

46%

46%

39%

31%

30%

26%

69%

64%

53%

51%

36%

31%

36%

30%

16%

21%

15%

My health

Potential healthcare costs

Whether my assets will last

Who will provide me with care if needed

Spending my time meaningfully

Whether my spouse/partner and I want similar things out of retirement

How much time I will spend with family

Where I will live

Whether I am emotionally prepared for retirement

Whether I would be able to maintain my social connections

No longer working

Concerns leading up to retirement Concerns now

15


How concerned were you about the following in the years leading up to your retirement?


Concerns Leading Up to RetirementBy years since retirement

Q. 89

69%

68%

65%

57%

51%

46%

68%

70%

67%

59%

51%

49%

71%

69%

66%

56%

54%

43%

69%

65%

64%

56%

50%

46%

My health





Whether my spouse/partner and I want similarthings out of retirement


16


How concerned were you about the following in the years leading up to your retirement?


Concerns Leading Up to Retirement (cont’d)

By years since retirementQ. 89

46%

39%

31%

30%

26%

45%

44%

32%

28%

30%

46%

34%

32%

33%

27%

48%

38%

30%

30%

22%


Where I will live


Whether I would be able to maintain my socialconnections

No longer working


17


…and how concerned are you about these now?


Retirement Concerns NowBy years since retirement

Q. 90

69%

64%

53%

51%

36%

36%

67%

66%

58%

53%

39%

35%

66%

63%

55%

47%

37%

35%

72%

63%

49%

53%

34%

38%

My health







18


…and how concerned are you about these now?


Retirement Concerns Now (cont’d)

By years since retirementQ. 90

31%

30%

21%

16%

15%

33%

35%

22%

21%

21%

33%

27%

22%

17%

15%

28%

27%

20%

11%

10%

Whether my spouse/partner and I want similarthings out of retirement

Where I will live

Whether I would be able to maintain my socialconnections


No longer working


19


Which of the following spending items are currently a major, minor, or not a concern for your household?


Major Spending ConcernsFor retirees

Q. 94

63%

72%

54%

49%

36%

36%

28%

32%

19%

36%

36%

44%

41%

44%

5%

9%

10%

15%

20%

23%

28%

Transportation expenses

Debt payments

Regular day-to-day expenses

Housing expenses (like mortgage, rent, propertytaxes, utilities, maintenance, etc.)

Out-of-pocket health care expenses

Health Insurance premiums

Long-term care services (like nursing home,assisted care, home health care, etc.)

Not a concern Minor concern Major concern

20


Which of the following spending items are currently a major, minor, or not a concern for your household?


Major Spending ConcernsBy years since retirement

Q. 94

28%

23%

20%

15%

10%

9%

5%

27%

27%

23%

18%

11%

9%

4%

27%

29%

24%

17%

11%

8%

5%

30%

17%

16%

12%

9%

10%

5%

Long-term care services (like nursing home, assisted care, homehealth care, etc.)

Health Insurance premiums

Out-of-pocket health care expenses

Housing expenses (like mortgage, rent, property taxes, utilities,maintenance, etc.)

Regular day-to-day expenses

Debt payments

Transportation expenses


FINANCIAL PRACTICES: RETIREES VS. WORKERS

22


How often do you think the following statements are true for you and your household? As of 2018. Base: total interviews

Financial PracticesBy retirees

Q. 70

89%

76%

37%

20%

8%

10%

9%

13%

29%

34%

14%

10%

1%

6%

20%

21%

27%

9%

1%

5%

14%

25%

52%

72%

You have problems paying your requiredmonthly bills

You carry a balance on your credit cardand pay interest

You use a fixed budget for your spending

You make some after-tax savings aftertaking care of all of your expenses

You are able to stick to your monthlybudget, if you have one

You pay your credit card balances in fullwhen due

Never Sometimes Often Always

23


How often do you think the following statements are true for you and your household?

As of 2018. "Often or always." Base: total interviews

Financial PracticesBy years since retirement

Q. 70

81%

79%

46%

34%

11%

3%

74%

77%

38%

38%

17%

4%

You pay your credit card balances in full when due

You are able to stick to your monthly budget, ifyou have one

You make some after-tax savings after taking careof all of your expenses


You carry a balance on your credit card and payinterest

You have problems paying your required monthlybills

Total retirees 1-5 years

24





Q. 70

81%

79%

46%

34%

11%

3%

81%

81%

46%

39%

11%

3%








25





Q. 70

81%

79%

46%

34%

11%

3%

85%

79%

52%

28%

7%

2%







Total retirees 11+ years

26


58%

21%

36%

19%

10%

20%

25%

37%

25%

38%

28%

23%

10%

26%

20%

23%

37%

18%

7%

16%

19%

21%

26%

39%

You have problems paying your required monthly bills


You carry a balance on your credit card and pay interest

You make some after-tax savings after taking care of allof your expenses

You are able to stick to your monthly budget, if youhave one


Never Sometimes Often Always

How often do you think the following statements are true for you and your household? As of 2018. Base: total interviews

Financial PracticesBy total workers

Q. 70

27



Sources of Funds for EmergencyBy retirees

Q. 35

If you suddenly faced an emergency that required more cash than you had on hand, to which of the following sources of funds would you turn?

40%

30%

28%

26%

24%

19%

9%

5%

5%

Your after-tax personal savings and investments

A special emergency fund account you haveestablished for such needs

Credit cards

Your balances in tax-deferred workplace retirementaccounts

A special emergency fund you mentally earmark forsuch needs

Home equity loan

Family members or friends

Other bank loan

No source of emergency cash/ No emergency fundavailable

28




Sources of Funds for EmergencyBy years since retirement

Q. 35

40%

30%

28%

26%

24%

19%

9%

5%

5%

38%

29%

35%

28%

25%

18%

10%

7%

4%


A special emergency fund account you have established forsuch needs

Credit cards

Your balances in tax-deferred workplace retirement accounts

A special emergency fund you mentally earmark for suchneeds

Home equity loan


Other bank loan

No source of emergency cash/ No emergency fund available


29





Q. 35

40%

30%

28%

26%

24%

19%

9%

5%

5%

36%

36%

28%

22%

27%

24%

14%

5%

4%



Credit cards



Home equity loan


Other bank loan



30





Q. 35

40%

30%

28%

26%

24%

19%

9%

5%

5%

43%

27%

23%

27%

22%

17%

6%

4%

6%



Credit cards



Home equity loan


Other bank loan


Total retirees 11+ years

31



Sources of Funds for EmergencyBy total workers

Q. 35


47%

32%

31%

24%

21%

18%

16%

14%

4%

Credit cards





Home equity loan

Other bank loan



focus on retirees retirement savings and spending 4 ... · representative national study of 3,005...

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