Retirees Found Some Expenses in Retirement Higher Than Expected

In addition, a survey finds, some Baby Boomers delayed retirement because they were facing significant health care costs.

In a survey of Baby Boomers, Capital Group found that, among those who are retired, 60% say that life post-employment is better than they had anticipated. Thirty percent say it meets their expectations, and 10% say it is worse than they expected, with many in this group blaming finances or health. Others point to lifestyle issues, such as boredom, loneliness or the fact they miss work.

However, despite many saying retirement is surprisingly better, Boomers face a myriad of costs that are surprisingly higher, starting with those for health care; 43% of Boomers say health care costs are higher than anticipated. Other unexpectedly high expenses are: travel (40%), taxes (34%), food (25%) and utilities (23%).

By comparison, only 11% of retired Boomers say they spend more than they had hoped to to support dependents, a mere 9% say credit card debt is a problem, and only 9% say housing costs exceed those anticipated.

Among all Baby Boomers, those retired and working, 45% say they retired at the age they had targeted or are on track to retire at a desired age, respectively. Thirty-one percent of those retired did so earlier than they had planned to and 24%, later. Among those who delayed retirement, 22% say it was because they enjoy working, but 19% say it was because their portfolio was adversely affected by the market. Additional reasons Boomers gave for delaying retirement include low wages, or a spouse or partner losing their job or facing significant health care costs.

Among those who retired early, 36% credit having saved enough. Eighteen percent say it was due to health issues. Others say it was because they lost their job or were offered early retirement by their employer. Some say it was to care for a family member with health issues.

Asked about their savings, 44% say those are in line with their expectations. Nearly one-third, 32%, say they saved more than they had expected. Only 23% saved less than they had hoped.

Capital Group’s report on Baby Boomers, “Expect the Unexpected: Baby Boomer Lessons on Investing and Retirement,” can be downloaded here.