Spending in Retirement - Or Not?

Dec 8, 2017 / Amanda Chase, Horsesmouth Editorial Assistant

Something unexpected has been the shared experience for our most recent generation of retirees. The vast majority haven’t been spending their retirement savings—leaving nest eggs mostly untouched and living on ready sources of income instead. However, future retirees may be less fortunate.

Research conducted by the BlackRock Retirement Institute (BRI) in conjunction with the Employee Benefit Research Institute (EBRI) found that on average across all wealth levels, most current retirees still have 80% of their pre-retirement savings after almost two decades in retirement.

Four key takeaways:

  1. These findings begin to challenge industry norms and academic theories about lifecycle consumption especially during the retirement phase
  2. Across all wealth levels measured, more than one third of current retirees grew their assets—leaving considerable potential consumption on the table
  3. Late in life out-of-pocket medical expenses—a major reason to retain assets—do not appear to be warranted except for a very small portion of the population
  4. The financial landscape for future retirees will most likely be more challenging, requiring different savings and spending behaviors

To read other findings, and download the full report, click here.

 

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