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.
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.
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.