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Visualize Retirement
Three Reasons for Optimism About Retirement
As a part of the Visualize Retirement program, Conversation Starters are an ongoing series of easy-to-digest articles designed to demystify the nonfinancial side of retirement. Stay in front of the conversation with fresh, relevant insights based on research into actual retiree behaviors.
Much of the talk around retirement expectations relates to how people aren’t saving enough or how high health care costs can be. This can cause anxiety as you approach your retirement years and leave you wondering if you’re going to be able to realize your retirement vision.
Our research, however, shows that your retirement years may exceed your expectations. About eight out of 10 retirees say they are enjoying their retirement years more than their primary working years, according to a T. Rowe Price study. This survey found that retirees are generally optimistic about retirement, with 86% of older retirees agreeing that retirement has turned out to be as good or better than they expected.
Our study revealed reasons for optimism in three key areas:
Quality of Life
Most prefer retirement living to their working years
Paying for Health Care
Most older retirees can cover costs
Leaving a Legacy
More than half of older retirees will have money to leave behind
A High Quality of Life
As they look ahead to retirement, merely 33% of workers think that they will live at least as well in retirement as they do currently. But the reality of quality of life in retirement—according to retirees—is far more positive. Eighty-one percent of older retirees say they’re enjoying their retirement years more than their primary working years.
33%
of workers think that they will live at least as well in retirement as they do currently.
but
81%
of older retirees say they’re enjoying their retirement years more than their primary working years.
Health Care Costs Are Manageable
When contemplating health care costs in retirement, only 39% of workers believe that they will have enough money to afford health care in retirement. Older retirees reveal that health care costs have been more manageable than worker predictions: Fifty-eight percent say that they have enough money for health care.
39%
of workers think that they will have enough money to afford health care in retirement.
yet
58%
of older retirees say they have enough money for health care.
Leaving a Legacy Is Attainable
A little more than one quarter of current workers think that they’ll be able to leave behind money for family members or charity. But close to double that amount of older retirees—51%—say they will be able to leave a legacy.
27%
of workers think that they will be able to leave money to family members or charities.
however
51%
of older retirees say they will be able to leave money to family members or charities.
When envisioning your retirement, it’s perfectly normal to have concerns about maintaining your quality of life, paying for health care costs, leaving a legacy, and other goals. But as you build your vision with your financial professional, take comfort in the findings above and believe that your vision can become your reality.
Contact your financial professional to learn more about reaching your retirement goals, including how creating a retirement vision can increase your chances of having a better-than-expected retirement.
Source: T. Rowe Price Retirement Savings and Spending Study (2019). The findings are based on a 2019 national study of (1) 1,005 current retirees who have a Rollover IRA or left-in-plan 401(k) balance and (2) 3,016 adults age 21 and older who have never retired and are currently contributing to a 401(k) plan or are eligible to contribute and have an account balance of at least $1,000. Older retirees are defined as those who have been retired for 11 years or more.
This material is provided for general and educational purposes only, and not intended to provide legal, tax or investment advice. This material does not provide recommendations concerning investments, investment strategies or account types; and not intended to suggest any particular investment action is appropriate for you. Please consider your own circumstances before making an investment decision.
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T. Rowe Price Investment Services, Inc.
