This year’s retirement forecast is for partly sunny skies with scattered thunderstorms affecting those with underlying financial and health challenges. The weather is little changed from last year, according to the 34th annual survey of retirement confidence released today by the Employee Benefits Research Institute (EBRI).
“Overall, two-thirds of the workers and three-fourths of the retirees are very or somewhat confident about having enough money to live comfortably in retirement, which is unchanged from 2023,” EBRI said in releasing the survey, which is based on interviews of more than 2,500 Americans, split evenly between those still working and retirees.
More highly paid employees with comfortable 401(k) retirement fund balances continue to populate the ranks of the most optimistic survey respondents. Retirement is not so sunny for those who will depend on Social Security for most of their retirement income.
I have written about this EBRI survey for decades. My major takeaway, and the source of today’s advice, often has been the mismatch between what workers say they will do in retirement and the experiences of those who are already retired. This continues to be true this year:
· Workers say they plan to work to a median age of 65; retirees actually stopped working at the age of 62.
· Three-fourths of active workers plan to seek money-making gigs in retirement; only 30 percent of retirees say they’ve done so.
· Only a third of current workers expect Social Security to be a major source of retirement income; more than 60 percent of retirees say it is.
“While most claim they understand Social Security,” EBRI said, “fewer than half of workers have reviewed the amount of their Social Security benefits at their planned retirement age, and 59 percent have thought about how the age at which they claim Social Security will impact the amount they receive.” Even among retirees, nearly one in four had not done this work.
If you are still working, I urge you to take another look at your retirement expectations. Especially Social Security. I recommend deferring benefits until they max out at age 70, unless there are solid reasons for claiming them sooner. Financial needs and concerns about your health may be among them. Many people also are concerned that the shaky financial stability of the program argues for taking benefits early while there’s money to pay for them.
I don’t share that view. I also would remind people that the age at which they take their own Social Security benefit may affect their spouse.
Claiming benefits before full retirement age reduces the level of spousal benefits. Full retirement age is 66 years and eight months this year and will rise to its statutory maximum of 67 in 2026.
When one spouse dies, the surviving spouse will receive the higher of their own benefit or that of their deceased partner. The highest-earning spouse should factor this into their decision about when to claim their benefit. Waiting until 70 could have a big impact on the lifetime benefits their spouse receives.
If you are not working, I urge you to not consider retirement a forever situation. “Unretirement” has become a thing! Part time jobs can provide social and intellectual benefits in addition to money. Volunteering might be your cup of tea, of course, but getting paid for doing something you like might not be so bad!
Take care and be kind.
Philip Moeller is the principal author of Simon & Schuster’s Get What’s Yours series of books about Social Security, Medicare, and health care. A new edition of his Medicare book will be published October 8. Substack; Threads.
67 years old, $950k in super.
RETIRED.
Will I survive?