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Home>UPDATE: What if the 'retirement crisis' has been exaggerated?

UPDATE: What if the 'retirement crisis' has been exaggerated?

UPDATE: What if the 'retirement crisis' has been exaggerated?


By Dana Anspach

How real retirees make retirement work

Every year, there is a new story of the scary "retirement crisis" facing our country.

It makes you wonder how real retirees are making retirement work. Have they run out of money, or somehow, are they managing to get by?

To take a closer look at how real people make retirement work, The Society of Actuaries (SOA) has conducted a series of studies, the latest of which is their Post-Retirement Experiences of Individuals 85+ Years Old (https://www.soa.org/resources/research-reports/2017/2017-post-retire-exp-85-years-old/) in which they conducted 62 in-depth interviews of individuals across both the U.S. and Canada.

The people interviewed were not wealthy and had done little to no financial planning but overwhelmingly disclosed they had adapted to their situation and had surprisingly few regrets. What? No crisis? How could this be?

The answer is simple. These retirees live frugally. They calibrate their expenses to the amount of income that comes in.

Could retirement success be that simple? In some cases, yes. You simply do what humans do well, you adapt. You maintain a short-term focus and make sure what goes out each month is no more than what comes in. The SOA research shows this works, and for the most part, retirees interviewed feel they live frugally, but are not uncomfortable. As the study describes, "Most had made peace with their standard of living a long time ago and learned to live within its constraints."

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