How much do workers expect to spend in retirement? How does that compare with what retirees report they actually spend?
The Employee Benefit Research Institute asked those questions in the 2010 Retirement Confidence survey. Here’s what they found:
More than half of workers expect their spending in the first five years of retirement to be a little lower or much lower than their spending in the five years before they retire. In addition the number saying they expect their spending to be much lower increased to 25 percent.
What was the reality for retirees? It turned out to be almost an equal split between those who indicated their spending retirement is higher or about the same as it was before retiring and those who said their spending is lower. Part of the reason for this is that many retirees find out they must spend more than they expected on health care expenses.
Lack of employment-based retiree health insurance may make further demands on retirement income. Many employers are eliminating health care coverage for future retirees, so some workers who expect to receive it may find themselves disappointed.
If you are interested in additional retirement planning information, the ‘Planning Ahead for Retirement’ publication could help you. To purchase a copy contact a county Extension Office or go online to the store at www.extension.umn.edu. It will guide you through a process of visioning retirement years, both financially and socially.