If you’re concerned about the size of your nest egg, you’re hardly alone: Nearly 6 in 10 Americans say that not having enough money to live on in retirement is their top financial worry.
But new research revealing the attitudes of recent retirees is heartening because it's surprisingly positive, and offers some insight into how we can all better prepare for our golden years.
According to an Ameriprise study of 1,000 baby boomers who have retired within the past five years, an overwhelming number, 76%, said they felt “in control” of their decision to retire—meaning that they were both mentally and financially prepared to leave the workforce.
On the financial side, these boomers believe they did a decent job of calculating how much money they would need once they stopped working. As they approached retirement, 75% were certain they’d have enough money to cover basic expenses. And once they’d actually retired, 57% were very satisfied with their financial situation.
While that may seem like a drop off in perceived versus actual financial preparedness, it didn't seem to impact the boomers' actual happiness in retirement too much: 75% said they were very satisfied with their lifestyle in retirement, and were spending their newfound free time doing just what they'd planned to do.
So what’s the takeaway from these retirees’ experiences? “This study finds that choosing a retirement date can be as much an emotional decision as a financial one,” Marcy Keckler, vice president of financial advice strategy at Ameriprise Financial, said in a statement. “With [this study], we’re finally seeing how the first wave of baby boomers approached this critical decision and how they’re feeling about it today.”
So what did these boomers do to feel so confident when most of us equate the word "retirement" with "stress?"
For starters, the study found that these boomers educated themselves about the financial resources that would be available to them in retirement. More than half consulted their employer plan resources before making the decision to retire, and nearly three-quarters researched information from Social Security or Medicare.
They also sought outside input for the big decision. Naturally, 80% consulted with their spouses about the decision to retire, but 38% also talked to a financial adviser, while 33% talked to friends and 29% consulted with their children.
Finally, the survey respondents appeared to come pretty close to estimating the amount of money they'd realistically need in retirement. Nearly half said they felt they estimated their retirement savings accurately, while 28% actually said they will need less money than they thought they would. Only 24% said they think they will need more than they saved.
Still struggling to reckon with the idea of your future, retired self? Try one of these clever strategies for retraining your brain to save more.