Black and Hispanic retirees, as well as those in the lower annual household income brackets and poor self-reported health status also indicated their spending is higher than they can afford.
The 2022 Spending in Retirement Survey was conducted by the Employee Benefit Research Institute. The study was conducted during the summer of 2022. Nearly 2,000 American retirees between the ages of 62 and 75 were surveyed to assess how spending patterns and retirement wellbeing have changed since 2020.
Other key findings of the survey include:
- Among those who decreased either their essential or discretionary spending since the pandemic, the most common reason cited by roughly 9 out of 10 retirees was concern about inflation.
- Approximately 7 in 10 retirees say they have three months of emergency savings.
- Black and Hispanic retirees, those in lower annual household income segments, low financial knowledge and poor self-reported health status are less likely to report they have 3 months of emergency savings set aside.
- Similar to 2020 survey results, 7 in 10 say Social Security is a major source of their income.
- Approximately half of retirees say they spend less than $2,000 each month, while 1 in 3 spend between $2,000 and $3,999 each month. Sixteen percent spend between $4,000 and $6,999, with only 3 percent spending $7,000 or more each month.
- On a scale of 1 to 10, retirees rate their satisfaction in retirement as 7.0 in 2022, compared to 7.4 in 2020.
- On a scale of 1 to 10, retirees rated their alignment of life in retirement with expectations with an average 6.4 in 2022, down from an average of 6.8 in 2020.
- Retiree segments that reported lower senses of wellbeing across the measures of standard of living, alignment, and satisfaction included without defined benefit or other annuity income, with low financial knowledge, those not using a financial advisor, who are not married and who are female.
“The 2022 Spending in Retirement Survey reveals that certain measures of retiree wellbeing have stagnated or declined since the pandemic. Specifically, the average ratings for alignment and satisfaction have declined since 2020, while more retirees say that spending has increased and is higher than they can afford,” said Bridget Bearden, Ph.D., research and development strategist, EBRI. “Inflation appears to be a major driver of the misalignment between expectations and reality, a double-edged sword that undoubtedly increases actual spending but also reduces spending, likely out of a desire to protect future purchasing power.”
Development of this research study was conducted through the financial support from the EBRI Retirement Security Research Center, Alliance for Lifetime Income, LGIM and Edelman Financial Engines.
To view the complete 22-page Issue Brief, “2022 Spending in Retirement Survey: Understanding the Pandemic’s Impact,” visit https://www.ebri.org/spending-in-retirement-survey.
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Crystal Graham
