Americans Approaching Retirement Share Their Vision of ‘Success’ for Their Post-Career Lives

TIAA survey finds that near-retirees want a life of freedom and flexibility enabled by financial security

Preparation and financial advice may help Americans achieve their retirement goals

NEW YORK--()--Americans approaching retirement are focused on more than just the amount of their nest egg, according to the new TIAA Transition to Retirement Survey. They want to achieve the financial freedom that will enable them to live life to the fullest, spend time with loved ones, and have experiences that deliver true meaning and purpose. In fact, 95 percent of survey respondents say that freedom from financial concern is important to their definition of success in retirement.

TIAA’s survey takes a fresh look at the people approaching retirement in order to gain insight about what they are focused on, where they will live and travel, and what they will do with their time, as well as how to pay for their life in retirement.

Among individuals who are 55 to 68 years old and planning to retire in the next five years, 96 percent say the flexibility to do what they want, when they want is an important consideration to their definition of a successful retirement. Spending time with family and friends (93 percent), relaxing (92 percent) and having the time to travel (80 percent) also are important to near-retirees.

“Americans have a clear vision of what success looks like in retirement, and that success isn’t just about a large sum of money. It’s about what money enables: the flexibility and freedom to enjoy life to the fullest,” said Ron Pressman, chief executive officer of Institutional Financial Services at TIAA. “A successful retirement means pursuing those things that matter most, while knowing your financial future is secure.”

Setting expectations

Retirement can be a moving target, and the survey reveals that many respondents have had to change their plans. More than one-third (37 percent) plan to retire at the same age as they planned 10 years ago, but an equal number (37 percent) say they now plan to retire later, and almost one-quarter (24 percent) plan to retire earlier than originally planned.

“As retirement grows closer, it’s a good idea to reflect on what is important to you. Some people will find they want or need to work longer, and others will realize they can leave their jobs sooner. Importantly, a number of people may find that their definition of a happy and successful retirement has changed over the years,” said Kathie Andrade, chief executive officer of Retail Financial Services at TIAA. “Financial advisors can help make sure you’re prepared to retire by working with you to set and revisit your goals for the future, making adjustments along the way.”

Although people approaching retirement have a strong vision for what success looks like, many are unsure of how to get there. Sitting down with a professional advisor, conducting online research or attending a retirement planning seminar could help them prepare. Forty-three percent say they’ve met with a financial advisor or calculated how much money they will need annually in retirement – steps that may help boost retirement confidence. Fifty-four percent of those who have met with an advisor feel extremely or very prepared for retirement, compared to just one-third (34 percent) of those who have not.

In addition to professional support, nearly two-thirds of near-retirees turn to their significant others when discussing financial and personal plans in retirement. Interestingly, men are much more likely to say they’ve discussed plans with their significant other than women (75 percent compared to 57 percent). Preparing for retirement together seems to help boost confidence: 66 percent of single transitioners feel unprepared, compared with 51 percent of their married counterparts. Only one-third of all respondents report discussing their plans for life and finances in retirement with their adult children.

Preparing for the years ahead

Though some people have anxiety about their readiness for the future as they get closer to retirement, 43 percent report feeling extremely or very prepared for the transition to retirement, and another 46 percent feel somewhat prepared for retirement.

More than half (55 percent) say they feel prepared to manage their income in retirement, yet only 21 percent anticipate their nest egg will last for their lifetime.

“Securing a source of income you can’t outlive is critical,” Pressman said. “A reliable retirement income prepares people to handle financial or lifestyle challenges after they stop working, especially since many people are living longer in retirement.”

In fact, people who plan to rely on income from an annuity (65 percent) feel more prepared to manage their income in retirement than those who will draw down savings from a defined-contribution retirement plan (54 percent). Yet only 17 percent of respondents have purchased an annuity as part of their retirement preparations.

Writing the next chapter

For many, the opportunity to leave the working world also means a chance to simplify. In fact, 21 percent of respondents have discarded, sold or donated belongings as they get ready for the future. When asked how they’ve already started preparing, people nearing retirement also report they have:

  • Researched travel (36 percent)
  • Made plans to spend more time with new or current interests (31 percent)
  • Researched or visited new places to live (27 percent)
  • Made plans with friends or family (25 percent)

Not everyone plans to stop working in retirement. While 19 percent have considered volunteering, even more—31 percent of men and 22 percent of women—also say they have investigated part-time or consulting work. Those figures may represent fears around financial stability or boredom in retirement.

A large portion of respondents plan to move in retirement, and many will choose a smaller home. While roughly the same number of men and women say they expect to move out of their current home (40 and 38 percent, respectively), they differ on where they’d like to go. Sixty-one percent of men plan to downsize to a smaller home, while only 49 percent of women say the same. Nearly one-quarter (24 percent) of women would like to move closer to family and friends, but only 10 percent of men plan to do so. These differences underscore how important it is for couples to communicate on all aspects of life in retirement – not just their finances.

Reflecting at the edge

Looking back, the biggest regrets among people nearing retirement are financial. The No. 1 thing transitioners wish they had done differently is to have started saving for retirement earlier (55 percent). Nearly half (46 percent) wish they had saved more of their salary for retirement, and 36 percent wish they had invested those savings more aggressively.

Those regrets are followed closely by concerns surrounding health and lifestyle. One-third regret not taking better care of their health, and 27 percent would have put more time and thought into their post-retirement career.

Additional health concerns about the future – and how to pay for them – keep many transitioners up at night. Fifty-two percent are anxious about declines in physical health and 43 percent are concerned about depleting their savings with health care costs in retirement. More than one-third (38 percent) fear they’ll run out of money to cover monthly expenses.

“Younger savers can learn a lot from those who will retire before them as they work toward their own retirement goals. Retirement is about beginning a wonderful new chapter, and not just about a moment in time or a number in the bank. Seek professional support and explore options for securing lifetime income so you can have the freedom to do what you love,” Andrade said.

For more information about the 2017 TIAA Transition to Retirement survey, read the executive summary.

About TIAA

TIAA (TIAA.org) is a unique financial partner. With an award-winning1 track record for consistent investment performance, TIAA is the leading provider of financial services in the academic, research, medical, cultural and government fields. TIAA has $938 billion in assets under management2 (as of 3/31/2017) and offers a wide range of financial solutions, including investing, banking, advice and guidance, and retirement services.

This survey was conducted by KRC Research from March 14 to 20, 2017, via an online survey of 1,000 Americans ages 55-68 planning to retire in the next five years.

1 The Thomson Reuters Lipper Large Fund Award is given to the group with the lowest average decile ranking of three years’ Consistent Return for eligible funds over the three-year period ended 11/30/12, 11/30/13, 11/30/14 and 11/30/15, respectively. TIAA was ranked among 36 fund companies in 2012, 48 fund companies in 2013 and 2014, and 37 fund companies in 2015 with at least five equity, five bond or three mixed-asset portfolios. Classification averages are calculated with all eligible share classes for each eligible classification. The calculation periods extend over 36, 60 and 120 months. The highest Lipper Leader for Consistent Return (Effective Return) value within each eligible classification determines the fund classification winner over three, five or 10 years. A detailed awards methodology can be found at excellence.thomsonreuters.com/award/lipper. For current performance and rankings, please visit the Research and Performance section on TIAA.org. Past performance does not guarantee future results.

2 Based on assets under management across Nuveen Investments affiliates and TIAA investment management teams

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TIAA
Lauren Post, 888-200-4062
media@tiaa.org

Contacts

TIAA
Lauren Post, 888-200-4062
media@tiaa.org