The Hopes, Fears, and Reality of Retirement

Nearly one in two Americans retire earlier than expected, yet retirees overwhelmingly report that they are enjoying themselves and discovering that pre-retirement fears of boredom, financial insecurity, and a lack of purpose were largely unfounded, according to a study by MassMutual Retirement Services. The biggest lesson for retirement success: plan as soon as possible for your emotional and financial well being, as you are likely to retire sooner than planned. “MassMutual’s research on retirees and pre-retirees tells us that retirement can be and should be an extraordinarily happy time in our lives as long as we start to strengthen our emotional bonds and exercise financial planning discipline well before we plan to retire. The happiest retirees provide us with a roadmap for success, which is especially instructive for those who are close to embarking on the journey,” said Elaine Sarsynski, executive vice president, MassMutual Retirement Services.

Seventy-two percent of retirees report being extremely or quite happy, 67% say they’re extremely or quite relaxed, and 66% say they are financially secure. Few characterize themselves as stressed, frustrated, lonely or distressed.

Retirees express positive sentiments about their lives despite that nearly half (45%) retire earlier than planned. The most frequently cited reasons for earlier-than-planned retirement are changes at work (44%) and being able to afford to retire sooner rather than later (39%). On a positive note, the majority (79%) of those who retired early have no regrets about their decision.

The study finds a strong relationship between happiness and planning as retirees who express the highest levels of satisfaction are also those who took concrete steps to put their emotional and financial lives in order at least five years or more before retirement:

• Those who began focusing on their relationships – building stronger connections to their spouse or significant other, reaching out to old friends or making new friends, and pursing new interests – were more likely to enjoy retirement.

• Additionally, those who took concrete financial steps such as calculating the best time to collect Social Security, targeting how much money they would need to afford retirement, and increasing savings report feeling more financially secure in retirement. Six in 10 (58%) of retirees who were most satisfied with their situation worked with a financial advisor before retirement.

Despite planning, many retirees report positive or negative surprises once they retired. The biggest positive surprises were having no time constraints and more freedom (23%), keeping busy and active (18%), having time with family and friends (11%) and being in a good financial position (10%). Negative surprises included having financial problems (17%), being too busy (13%), or suffering an illness or disability (10%). The fact that one in six has unexpected financial problems indicates that more efforts at financial planning are needed.

Retirees demonstrate an ability to adapt to changing circumstances, indicating increased satisfaction, improved ability to manage spending, and greater feelings of financial security as their tenure in retirement grows, the study found. Although unexpected life events can occur, focus groups found that retirees adapt financially by finding creative ways to cut expenses without giving up activities they enjoy.

Overall, retirees report lives that are quite positive, including enjoying themselves (82%), having more free time (80%), and having new experiences (69%). In some instances, the expectations of pre-retirees about retirement fall short of the actual experience, such as 79% of pre-retirees anticipating new experiences. Few (6%) made plans to start a new career.

Although pre-retirees express fears they will be anxious about financial uncertainty in retirement (44%), they will not know what to do without their jobs (31%) and they will be bored (26%), few retirees find this to be the case (31%, 14% and 19% respectively), according to the study.

Concerns about retirement decrease as pre-retirees approach retirement. For example, 31% of pre-retirees who are 11-15 years away from retirement say they are looking forward to the experience with very few or no concerns compared to 43% less than five years away. Forty-six% of those within one year of retirement had very few or no concerns.

Feelings of financial security build as pre-retirees get closer to retirement and continue to rise through retirement. Only 63% of pre-retirees 11-15 years out feel they are financially on track, compared to 82% of those retiring in less than five years. Positive emotions increase and negative emotions decrease for retirees. The study finds that retirees are happier, more relaxed and less stressed than pre-retirees: extremely happy (72% compared to 61%, respectively), extremely relaxed (67%, compared to 34%, respectively) and moderately stressed (17%, compared to 43%, respectively). Still, pre-retirees overestimated the extent to which retirement would have a positive emotional impact, with 86% of pre-retirees expecting a least moderate excitement in retirement compared to 71% of retirees who say they feel this way

Last Updated 12/01/2021

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