More than half (55%) of 2,000 American retirees recently surveyed said they have retired earlier than expected during the COVID-19 pandemic, according to EBRI’s 2022 Spending in Retirement Survey.
Forty percent said they retired about when they expected, and 4% said they retired later than expected.
The respondents, aged 62 to 75, were surveyed to assess how spending patterns and retirement well-being have changed since 2020. Of those who said they retired early during the pandemic, most said that the ability to retire and health issues not related to COVID-19 fueled their decisions.
Approximately 70% of the surveyed retirees said they have three months of emergency savings and, similar to 2020 results, the same amount said that Social Security is a major source of their income. Black and Hispanic participants, those in lower annual household income segments, those with low financial knowledge and those with poor self-reported health status were less likely to report that they have three months of emergency savings set aside.
Some variation existed in the results by financial knowledge and race. Respondents with a low level of financial knowledge were more likely than other groups to report retiring early. Black and Hispanic respondents generally were more likely to retire early than their white counterparts. Black and Hispanic retirees also were more likely to report health problems as the reason for retiring.
Participants’ most reported sources of information on transitioning to retirement included a personal, professional financial adviser (30%), online resources and research (24%) and a prior employer (23%). Black retirees were more likely to report relying on their employers (32%) and less likely to rely on financial advisers (16%).
Respondents in 2022 were more likely to report that their spending outpaced the amount they could afford to spend than they had in 2020 (17% in 2020 versus 27% in 2022). On average, according to the data, retirees spent almost a third of their monthly income on housing expenses. The second largest reported expenditure was food.
About a third of the participants said that they worked in some capacity after retiring from their primary career.
“While retirees did not indicate that having an opportunity to socialize drove their return to work in retirement to a great extent, it was one of the most common factors having some impact,” wrote Bridget Bearden, PhD, research and development strategist with EBRI.
Other factors included wanting additional income for discretionary and unexpected expenses, access to insurance benefits, and the opportunity to delay claiming Social Security benefits.
