Most Retirees Say Employers Did Nothing to Help With Retirement Transition

A survey of 2,043 retirees by the Transamerica Center for Retirement Studies (TCRS) shows two-thirds (66%) say their most recent employers did “nothing” to help pre-retirees transition into retirement, and 16% are “not sure” what their employers did.

Among the 18% of retirees whose employers helped pre-retirees, the most frequently cited offerings are financial counseling about retirement (6%), seminars and education about transitioning into retirement (5%), the ability to reduce work hours and shift from full- to part-time (5%), and accommodating flexible work schedules and arrangements (5%).

When looking back on their retirement preparations, almost three in four retirees (73%) agree they wish they would have saved more and on a consistent basis. About two-thirds (67%) say they did as much as they could to prepare for retirement, but almost as many (64%) wish they had been more knowledgeable about retirement saving and investing. Three in ten used a financial adviser before retiring to help them manage their retirement savings or investments.

Many retirees also agree they waited too long to concern themselves with saving and investing for retirement (50%) and that debt interfered with their ability to save as much as they needed for a comfortable retirement (47%). 

The survey found 31% of retirees started saving before the age of 40, while 39% started saving in their forties or older. The median age retirees first started saving was 40. Three in ten indicate they did not save for retirement.

For the majority of their working careers, 68% of retirees participated in some form of employer-sponsored retirement benefits, including 49% who participated in a 401(k) or similar plan and 37% who participated in a defined benefit (DB) plan. Thirty-two percent of retirees worked for employers that did not offer any retirement benefits. The majority of retirees (61%) say they saved for retirement outside of work.

Fifty-four percent of retirees had a retirement strategy before they retired; however, only 10% had a written plan, while 44% had a plan but it was not written down. Forty-six percent did not have a retirement strategy.

The retirement experience

Fewer than half of retirees (46%) surveyed by the TCRS agree that they have built a large enough retirement nest egg, of whom only 16% “strongly agree.” Yet, 67% say they are confident that they will be able to maintain a comfortable lifestyle throughout retirement, with 18% being “very confident.”

Since entering retirement, 42% of retirees indicate that their personal financial situation has “stayed the same,” while approximately one in three (36%) indicate it has “declined.” Only 20% of retirees say that their personal financial situation has “improved.”

Since entering retirement, almost six in ten retirees (59%) spend less money each year, compared with when they were working. Thirty-one percent spend the same amount of money each year, and only 6% spend more money each year in retirement.

Retirees cite diverse sources of income, but Social Security is the primary source of income for most retirees. The survey found nearly all retirees (96%) receive income from Social Security. Sixty-six percent of retirees indicate that Social Security will be their primary source of income over the course of their retirement. Twenty-one percent cite retirement accounts and personal savings, including a 401(k) or similar accounts, IRAs (10%) and other savings and investments (11%). One in 10 retirees cite a DB plan as their primary source of income.

The survey confirms that retiring later is not the best retirement strategy, as it found more than half of retirees (56%) retired sooner than they had planned. Among those, more than half (54%) cite employment-related reasons, including job loss (24%), organizational changes at their place of employment (22%), unhappiness with their job (15%), and/or took a retirement incentive or buyout (11%). Forty-seven percent cite health and/or family-related reasons, including their own ill health (28%), family responsibilities (15%), and/or their spouse/partner retired. Only 11% of retirees retired sooner than planned because of financial ability, including they had saved enough and could afford to retire (10%) and/or they received a financial windfall (1%).

Among the small proportion (9%) of retirees who retired later than planned, 75% cite financial-related reasons, including needing the income (54%), they hadn’t saved enough for retirement (27%), general anxieties about their financial situation (23%), Social Security less than expected (18%), needing health benefits (12%), and/or recovering from a major financial setback (8%). Sixty-four percent of retirees who retired later than planned cite healthy aging-related reasons, including enjoying their work (43%), staying active (42%), and keeping their brain alert (27%). Ten percent indicate that their employer requested that they stay longer, and 5% indicate their spouse/partner retired sooner than planned.

TCRS’ survey report, “A Precarious Existence: How Today’s Retirees Are Financially Faring in Retirement,” includes many other findings about the retiree experience, as well as tips for pre-retirees and retirement policy recommendations.