Transamerica Annual Retirement Survey 2020

[Gumby]

I just found this new survey of retirees conducted by Transamerica. Among many other interesting factoids, it appears that Social Security is the primary source of retirement income for 69% of retirees and that the plurality take it at 62.

There are a number of suggestions for individual action offered (with respect to documentation, end of life planning, etc.) that many here will find old hat, but I found it helpful to read through them.

https://www.transamericacenter.org/...rs2020_sr_retiree-retirement-amid-covid19.pdf

 

[donheff]

Interesting survey. A couple of observations (or maybe guesses from the responses) are that a lot of people are getting by pretty well (by their own lights) on Social Security and little else. Quite a few people have no plan for retirement or understanding of retirement expenses. I suspect many of those don't plan or analyse because they have limited sources of income and couldn't change much if they wanted to. Basically, they have what they have and will make do as best they can.

 

[Offgrid Organic Farmer]

I am not old enough for SS yet, but I guess when I do get that old I will get SS alongside my military pension.

 

[pb4uski]

Interesting survey. A couple of observations (or maybe guesses from the responses) are that a lot of people are getting by pretty well (by their own lights) on Social Security and little else. Quite a few people have no plan for retirement or understanding of retirement expenses. I suspect many of those don't plan or analyse because they have limited sources of income and couldn't change much if they wanted to. Basically, they have what they have and will make do as best they can.

Sounds like a friend of mine. I was talking with him the other day and he plans to retire in 2021. He told me he had "a lot' in his 401k... then later in the conversation mentioned that it was $70k. However, between SS, profits from an income property that he owns and his savings he'll probably be ok because he is very frugal. He'll make do spending what he has available.

 

[COcheesehead]

Interesting survey. A couple of observations (or maybe guesses from the responses) are that a lot of people are getting by pretty well (by their own lights) on Social Security and little else. Quite a few people have no plan for retirement or understanding of retirement expenses. I suspect many of those don't plan or analyse because they have limited sources of income and couldn't change much if they wanted to. Basically, they have what they have and will make do as best they can.

When your expectations are low, you can get by on little.

Who works most of their life to “get by?”

For those still planning...set your sights higher.

 

[davebarnes]

One in three are wasting money on financial advisors.

 

[jollystomper]

Thanks for the link to this. At 85 pages I will take my time going through it. One aspect I found interesting was who was surveyed:

A 27-minute, online survey was conducted between November 13 -December 4, 2019 among a nationally representative sample of 2,040 retirees. Retirees met the following criteria:
–U.S. residents, age 50 or older
–Consider themselves to be fully (N=1,841) or semi-retired (N=199)
–Worked for a for-profit company employing one or more people for the majority of their career

It seems this criteria excludes those who worked for federal, state, or local governments. Just noting it as an observation.

 

[Rianne]

Talk about thorough!



Pages are encouraging:

35 - About positive outlook on life
36 - Taking care of their health
52 - Familiar with partner financial health
53, 54 - No financial dependents, very little support



Discouraging:
40 - SS primary source of income
43 - Limited Savings
44 - Limited Income
47, 48 - FA Assistance

 

[Chuckanut]

Sounds like a friend of mine. I was talking with him the other day and he plans to retire in 2021. He told me he had "a lot' in his 401k... then later in the conversation mentioned that it was $70k. However, between SS, profits from an income property that he owns and his savings he'll probably be ok because he is very frugal. He'll make do spending what he has available.

People are good at making do. Very good at times.

I've mentioned this before but I think it is an example of 'making do' that is worth mentioning again. Four older women I know of all have only SS as their source of income. But, one of them owns her house free and clear. They all share the house. The three non-owners pay the owner a small monthly rent that she uses to maintain the house, pay for the utilities, hire a gardener, etc. Otherwise she would not have the money to keep the house in good shape. Spring through summer they have a nice vegetable garden Two of the ladies brought a car to their group and they use them for simple errands. Thankfully, they are both reliable vehicles that require little in the way of repairs. The homeowner gets a big discount on her property tax because she is low-income (60% I think). They occasionally hit the food bank if an unexpected bill throws them off. They go to tea/coffee once a week. They visit various museum on the 'free' day for seniors. They host dinner for kids and grandkids from time to time. They pay back to society by sewing baby clothes from cloth donated to the senior center.

They still enjoy relatively independent lives which is important.

They make do. Many in the world are far worse off.

 

[Offgrid Organic Farmer]

People are good at making do. Very good at times.

I've mentioned this before but I think it is an example of 'making do' that is worth mentioning again. Four older women I know of all have only SS as their source of income. But, one of them owns her house free and clear. They all share the house. The three non-owners pay the owner a small monthly rent that she uses to maintain the house, pay for the utilities, hire a gardener, etc. Otherwise she would not have the money to keep the house in good shape. Spring through summer they have a nice vegetable garden Two of the ladies brought a car to their group and they use them for simple errands. Thankfully, they are both reliable vehicles that require little in the way of repairs. The homeowner gets a big discount on her property tax because she is low-income (60% I think). They occasionally hit the food bank if an unexpected bill throws them off. They go to tea/coffee once a week. They visit various museum on the 'free' day for seniors. They host dinner for kids and grandkids from time to time. They pay back to society by sewing baby clothes from cloth donated to the senior center.

They still enjoy relatively independent lives which is important.

They make do. Many in the world are far worse off.

Since I live in the state with the oldest average age of residents, I know a lot of fellow retirees. Most of them are living on SS income. They all own their homes, most of them paid off all debt before they retired.

If half of your SS income remains as discretionary funds I do not see how is a problem.

I guess it would be more difficult if you settled in a high COL area though.

 

[Plantman]

From the survey: 4 percent of the fully retired do not ever expect to stop working. Huh?

 

[mickeyd]

They still enjoy relatively independent lives which is important.

They make do. Many in the world are far worse off.

I suspect that this applies to many folks here.

Stay the course.

 

[Gumby]

From the survey: 4 percent of the fully retired do not ever expect to stop working. Huh?

I suspect quite a few people consider that they are retired if they are collecting social security, regardless of whether they also have paid employment.

 

[mickeyd]

Few Retirees Have a Written Retirement Strategy. Fifty-eight percent of retirees amid the pandemic have a current financial
strategy for retirement – but only 18 percent have it in writing, while 40 percent have a plan that is not written. Many retirees
amid the pandemic (42 percent) do not have a financial strategy for retirement.

This is troubling to me.

Most regular posters here seem to grasp the concept of putting your financial plans in writing. We understand that having a plan and committing that plan to writing keeps us centered and our financial lives focused. It is not a difficult task AND it can be changed because it is YOUR plan.

 

[MrsHaloFIRE]

Agree, as I had a manager who refused to believe I was retiring bc i was not old enough to draw SS and had not earned a pension. He insisted I was quitting. No bro, listen to my words. Im retiring.

I suspect quite a few people consider that they are retired if they are collecting social security, regardless of whether they also have paid employment.

 

[rothlev]

Thanks for the link to this. At 85 pages I will take my time going through it. One aspect I found interesting was who was surveyed:



It seems this criteria excludes those who worked for federal, state, or local governments. Just noting it as an observation.

From which one can deduce that the average income levels are skewed lower than they would be if this group was included in the survey.

 

[Sunset]

This is troubling to me.

Most regular posters here seem to grasp the concept of putting your financial plans in writing. We understand that having a plan and committing that plan to writing keeps us centered and our financial lives focused. It is not a difficult task AND it can be changed because it is YOUR plan.

I'm one of those ones that don't have a written financial plan.

I'm not sure how it would help improve what I already do.

Currently we continue doing what we do or don't do what we shouldn't do:

• Do careful diversified investments.
• Don't invest in Billy Bob's (et al) new business venture.
• Never bet the farm.
• Spend enough to enjoy life, but don't waste money.
• Support relatives to a small degree.
• Track our spending monthly and asset values yearly.

I probably need actual examples of written financial plans to understand what is better.

 

[harllee]

People are good at making do. Very good at times.

I've mentioned this before but I think it is an example of 'making do' that is worth mentioning again. Four older women I know of all have only SS as their source of income. But, one of them owns her house free and clear. They all share the house. The three non-owners pay the owner a small monthly rent that she uses to maintain the house, pay for the utilities, hire a gardener, etc. Otherwise she would not have the money to keep the house in good shape. Spring through summer they have a nice vegetable garden Two of the ladies brought a car to their group and they use them for simple errands. Thankfully, they are both reliable vehicles that require little in the way of repairs. The homeowner gets a big discount on her property tax because she is low-income (60% I think). They occasionally hit the food bank if an unexpected bill throws them off. They go to tea/coffee once a week. They visit various museum on the 'free' day for seniors. They host dinner for kids and grandkids from time to time. They pay back to society by sewing baby clothes from cloth donated to the senior center.

They still enjoy relatively independent lives which is important.

They make do. Many in the world are far worse off.

I love your description of these ladies, they sound like my kind of people. I would love to meet them. I wonder what will happen to them when the lady who owns the house dies. Has she made any arrangements for the other 3 ladies to be able to stay there? I also wonder how they have been impacted by Covid--I bet it has not changed their life style much, except for going to museums. We all could get by on much less if we needed to and I bet most of us would be very happy.

 

[JustCurious]

I suspect quite a few people consider that they are retired if they are collecting social security, regardless of whether they also have paid employment.

We have to get the Internet Retirement Police involved.

 

[RobbieB]

Don't have a written plan
Don't track spending
Don't have a budget
Don't balance checkbooks
Don't worry either

 

[daylatedollarshort]

I love your description of these ladies, they sound like my kind of people. I would love to meet them. I wonder what will happen to them when the lady who owns the house dies. Has she made any arrangements for the other 3 ladies to be able to stay there? I also wonder how they have been impacted by Covid--I bet it has not changed their life style much, except for going to museums. We all could get by on much less if we needed to and I bet most of us would be very happy.

One of our local senior clubs has a roommate matching service to match up seniors with a room to rent and renters looking for affordable housing. They do the background checks on both parties, visits the home and conduct interviews.


To live reasonably well on just SS alone, for some retirees that may mean living more like a college kid with multiple roommates and public transportation, only with Social Security and Medicare / Medicaid. Four seniors living together with $15K in SS each would have a household income of $60K.

 

[RunningBum]

I'm one of those ones that don't have a written financial plan.

I'm not sure how it would help improve what I already do.

...

I probably need actual examples of written financial plans to understand what is better.

My first instinct is to say I don't have a written financial plan, since I don't have this all-encompassing plan in words that say "I'll do this and that and so on".

However, I did have a target retirement budget before I retired (which I went over countless times to make sure I didn't miss anything, especially the irregular expenses), a "net worth" spreadsheet with a target total of investments to support that budget, and also a target asset allocation. And now that I'm retired I have a VPW spreadsheet that shows my target budget allowance each year. I have a cash flow spreadsheet how to get to 65 without having to sell more appreciated stock, and a yearly taxable income spreadsheet to pay my estimated taxes and keep me the 0% cap gains or ACA subsidy level. Numbers are written as well as words, right? Also, a lot of these spreadsheets have some text to explain some things or why I have a target for a total, etc.

And now that I think about it, I do have some text documents for considering the ACA subsidy vs. more Roth conversions, and factors for when to take social security.

And while not for me, I do have an investment advice document for my son for whenever he inherits the bulk of my estate.

By golly, I guess I do have a written plan, or written docs that comprise a plan. And while I could probably make do with a lot less details now since I've spent a lot of time on these docs, it certainly has been helpful as I've developed them.

I try to remember to save at least one "net worth" document from a year, and I was looking through some old ones. A couple years ago I color coded sections, like investments, asset allocation calcs, SS and pension benefits, etc. I didn't appreciate how much nicer it is to read that doc until I opened old net worth spreadsheets that weren't coded.

 

[deserat]

Thank you, RunningBum, for posting the link.

I am halfway through the document. Couple of observations:

1) The language used in how the data was analyzed is interesting. It is definitely slanted towards how TD Ameritrade can 'assist' retirees. Example: "Many retirees have limited household savings" yet when looking at accompanying graph-data, fully 33% have greater than $100K and 18% greater than $500K - that coupled with the SS that most are receiving, it seems to me that many are doing OK. Of course don't have 7 figure portfolio, however, the words used color the influences the message the report wishes to convey.

2) "Approximately one-third use a professional advisor" - definitely a question used to inform the progenitors of the study. To me a better, less-'loaded' question would be: "What resources do you use to assist you in managing your finances?" and then shred out from there what types of resources and how those resources are used.

3) Some questions had obvious answers or answers that should be obvious, for example, what health insurance do you use. Of course most retirees in the USA would use Medicare as I understand it is difficult not to. What I found most interesting about that question is the very low number of TRICARE users (4%). I wonder if the question was properly worded so the surveyees could understand it: TRICARE for Life as a Medicare supplement, which might necessitate a two part answer. As for 4%, I thought there were a lot more people using TRICARE, however, I grew up in that TRICARE fishbowl, so probably can't see anything outside my water.

4) I am not surprised at the answers regarding long-term care. This discussions in this BB group and Bogleheads demonstrates that question is even complex and difficult for those people who do the research, analyze the situation and make a decision.

5) The second page touts quite dramatically the 'owner' of the report. She has an interesting background and it looks like she is big into the marketing of herself

Again, thanks for the link.

 

[Dtail]

Not having a written financial plan could be an issue down the road, if the finance person in the relationship passes on first and the remaining person has no financial clues as to investment planning and needs to go to a financial advisor.

 

[Dtail]

Thank you, RunningBum, for posting the link.

I am halfway through the document. Couple of observations:

1) The language used in how the data was analyzed is interesting. It is definitely slanted towards how TD Ameritrade can 'assist' retirees. Example: "Many retirees have limited household savings" yet when looking at accompanying graph-data, fully 33% have greater than $100K and 18% greater than $500K - that coupled with the SS that most are receiving, it seems to me that many are doing OK. Of course don't have 7 figure portfolio, however, the words used color the influences the message the report wishes to convey.

2) "Approximately one-third use a professional advisor" - definitely a question used to inform the progenitors of the study. To me a better, less-'loaded' question would be: "What resources do you use to assist you in managing your finances?" and then shred out from there what types of resources and how those resources are used.

3) Some questions had obvious answers or answers that should be obvious, for example, what health insurance do you use. Of course most retirees in the USA would use Medicare as I understand it is difficult not to. What I found most interesting about that question is the very low number of TRICARE users (4%). I wonder if the question was properly worded so the surveyees could understand it: TRICARE for Life as a Medicare supplement, which might necessitate a two part answer. As for 4%, I thought there were a lot more people using TRICARE, however, I grew up in that TRICARE fishbowl, so probably can't see anything outside my water.

4) I am not surprised at the answers regarding long-term care. This discussions in this BB group and Bogleheads demonstrates that question is even complex and difficult for those people who do the research, analyze the situation and make a decision.

5) The second page touts quite dramatically the 'owner' of the report. She has an interesting background and it looks like she is big into the marketing of herself

Again, thanks for the link.

Perhaps the low level of Tricare users was due to a lack of heavy inclusion of government workers.