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Americans Aren’t Loving Retirement Like They Used To — Here’s Why

Americans Aren’t Loving Retirement Like They Used To — Here’s Why

Retirement is a time to shake off years of employment and enjoy life, right? That might be the goal, but many Americans aren’t feeling it.

Dwindling satisfaction

A 2016 Employee Benefit Research Institute (EBRI) study analyzed retirement satisfaction trends between 1998 and 2012. Respondents who said they were “very satisfied” with their retirements dropped by 11.9 percentage points, those “not at all” satisfied increased by 2.6 percentage points, and the middle-of-the-road “moderately satisfied” response saw a gain of 9.2 percentage points.

Happiness in retirement can seem like an illusive goal. Wealth is important, but it won’t sustain long-term satisfaction. Health is also important, though it usually diminishes with age. While EBRI’s study doesn’t tell the whole story, it does provide insight into how you can leave the workforce on a strong note.

mature woman looking out the window
Image source: Getty Images.

Save aggressively

Wealth doesn’t hold a monopoly on happiness, but it doesn’t hurt, either. This is reflected in the survey’s results, which found that retirees in the highest asset quartile tend to be the most satisfied in retirement.

Group1998 Very Satisfied2012 Very Satisfied1998 Moderately Satisfied2012 Moderately Satisfied
Highest Asset Quartile72.5%62.5%23.9%34.1%
Overall Sampling60.5%48.6%31.7%40.9%

Source: Employee Benefit Research Institute estimates from Health and Retirement Study (HRS).

Both groups saw their satisfaction levels decline over time, as health and income eroded. Yet, more people in the highest asset quartile were “very satisfied” with their retirement compared to the group overall. Their net worths averaged $374,398 in 1998, compared to $202,918 for all participants.

The difference here isn’t huge, and your retirement satisfaction can be great regardless of income. That said, well-maintained retirement savings can help you manage the rising costs of living, cover health-related expenses, and provide more lifestyle choices.

mature couple using laptop
Image source: Getty Images.

Recent studies suggest that you and your spouse will need at least $360,000 to cover medical costs and long-term care expenses during retirement. If you’re not sure how much you’ll need beyond that, a good rule of thumb is to multiply your annual expenses by 25. Assuming you only withdraw 4% of your retirement income per year, this number is what you’ll need to maintain your current standard of living.

Find a supportive employer

Study respondents who retired with pension benefits were more likely to be “very satisfied” after 15 years in retirement compared to those without them, to the tune of 57.5% and 46.5%, respectively. Over the last decade, however, pension benefits have become less common in the public sector and even…

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