This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Workers Worry About Retirement, But Retirees Are Happy

NEW YORK (TheStreet) -- Maybe it's a sign the times are changing in a permanent, more budget conscious way: American retirees are living on less, with a reliance on about 66% of their pre-retirement income, according to T. Rowe Price.

That doesn't mean retirees are at all dissatisfied with their lifestyles. A solid plurality -- 57% -- say they live as well or better now than in their working years, in part because 85% say they don't have to spend as much as they did in their working years to be happy.

If anyone is worried about their retirement, it's workers and not retirees.

Read More: 5 Land Mines to Avoid in Funding Your 401(k)

T. Rowe Price says 49% of workers are already fretting about having to do more with less in retirement, and more current workers say they will run out of money in retirement than do current retirees, including fears they will not be able to pay for health care in retirement.

Demographically, most people plan on retiring at age 68, and plan on having an average $693,000 saved up for that time. Just 20% of workers say they will start collecting Social Security benefits early, at age 62. (By waiting until age 70 to take Social Security, workers can earn 25% to 30% more income in every government check.)

Social Security does represent the largest portion of current retiree income, though: 43%. According to T. Rowe Price, the second-largest source is traditional defined-benefit plans (19%), and the third-largest chunk of change comes from personal savings.

Read More: 5 Ways to Hike Your IRA Contributions

Also 35% of Americans are either looking for work or working full time or part time while in retirement, suggesting a new normal for retirees.

"For workers approaching retirement, we know there is anxiety and uncertainty as they look ahead and think they can't possibly be prepared for retirement," says Aimee DeCamillo, head of T. Rowe Price Retirement Plan Services.

"But this study demonstrates that you can do it. Many people are successfully saving in the private retirement system, and they report that post transition, they are fine. We have an opportunity to share these positive stories with 401(k) savers. We also need to emphasize the important role Social Security plays as the foundation of retirement income for most American households and the strategic advantages of delaying Social Security benefits," DeCamillo says.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $128.46 0.00%
FB $78.97 0.00%
GOOG $558.40 0.00%
TSLA $203.34 0.00%
YHOO $44.28 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs