Are you ready to retire?

When it comes to preparing for retirement and thinking through a financial approach to building a best life, many individuals recognize the importance of a holistic plan. This may include calculating expenses, narrowing in on your goals and identifying how your retirement income can support these dreams for the future. And while many people have the basics covered in their retirement plan, a recent survey uncovered that some individuals are leaving potentially costly gaps.

Financial steps to make before retiring 

When asking pre-retirees which financial steps they plan to make before retiring, over 40 percent of respondents said they aim to pay off their mortgage. The same amount wishes to pay off credit cards or other high-rate debt. In addition, 35 percent of pre-retirees said they want to coordinate claiming of Social Security benefits with their spouse. Other priorities included purchasing an annuity to provide income and partnering with a financial professional to develop a retirement plan. 

Making money last in the future

In today’s financial landscape, people headed into retirement are facing unique challenges, from rising inflation and increased health care expenses to dwindling pensions and market uncertainty. The survey found that 37 percent of respondents chose to increase their cash savings to avoid market volatility and running out of money in retirement. As lifespans continue to lengthen, stretching retirement dollars to last a lifetime is becoming increasingly difficult. Pinpointing any gaps between retirement income and expenses as soon as possible can help prevent a stressful situation later and allow you to find solutions that can round out your strategy. 

Retirement planning gaps

Ensuring your basic living expenses are covered and aligning goals with retirement income can be important to creating a more secure financial future, but where can common planning gaps pop up? For survey respondents, there were still some areas that needed attention before they were ready to retire:

• Discuss caregiving, long-term care or estate plans with loved ones
• Determine how to minimize taxes in retirement
• Create an estate plan
• Develop plan for managing long-term care expenses
• Create a strategy for taking withdrawals from savings

Connecting with your future self and asking important questions can help you prepare financially for both planned and unexpected expenses and allow you to step into the next chapter with greater confidence.

Encountering surprises in retirement

Just like many stages in life, the reality of retirement can sometimes end up being different from what was expected. For most respondents in retirement, they shared they encountered some surprises, and several expenses were higher than anticipated. Over half of retirees said inflation is higher than expected, and over a quarter found health care to be more expensive once they retired. Additional surprises included:

• Living expenses being the same or higher as before retiring
• Social Security accounts for more of their annual income than expected
• Job loss or health reasons forced an earlier-than-expected retirement 

In regards to Social Security, many pre-retirees say they don’t plan on taking these retirement benefits early, but for retirees, they found the reality is much different. While only 11 percent of pre-retirees planned to claim Social Security at age 62, in actuality, over 40 percent of retirees ended up having to claim as early as possible when they turned this age. 

Lessons learned from retirees

Hindsight is often 20/20, so what do retirees wish they could have done differently in their pre-retirement years? Of the survey respondents, five financial re-dos emerged:

• Save more for the future
• Start planning earlier
• Invest more aggressively
• Work longer if possible
• Choose solution that provides lifetime income stream

One out of five retirees wish they had invested in a product, like an annuity, that provided guaranteed income for life. With a retirement paycheck you can count on, there may be less stress about running out of money or not being able to cover living expenses or unexpected health care costs and emergencies. Creating a holistic retirement plan that accounts for planned expenses, and offers flexibility for life’s uncertainties, can help close any income gaps and allow you to reach your retirement goals more successfully.

Seeking professional advice

Curious if you’ve checked all the boxes and are financially ready to retire? It may be helpful to review your finances and retirement income plan with a financial professional. Over half of survey respondents say they worked with a financial professional to develop their retirement strategy, but many plan to seek further professional advice from a trusted source. Expert guidance can help provide a useful perspective on your retirement preparedness and determine if there are any financial to do’s yet to tackle. The sooner you find potential gaps in your retirement plan, the sooner you can find solutions that help bring greater financial security and stability to your future. 

Want the most from your retirement? Get smarter with Smart Strategies from Athene. Your source for tips, tools and financial solutions that can help you live your best life.

Survey Methodology: The Athene national public opinion poll surveyed 730 respondents ages 55 and older (split 60/40 between retirees and pre-retirees). Respondents had a net worth of at least $100,000, and the median household net worth (excluding primary residence) was $427,551 for retirees and $339,583 for pre-retirees. The poll was conducted by Qualtrics from June 16 to June 26, 2023. 

The term “financial professional” is not intended to imply engagement in an advisory business with compensation unrelated to sales. Financial professionals will be paid a commission on the sale of an annuity.