Overall retirement expenses were higher than predicted for 36% of 60-69 year olds, 52% of 70-79 year olds and 66% of 80-89 year olds who responded to the survey, according to a Sun Life press release. When asked what they would do differently, retirees said they would start saving earlier and/or put more money aside.
A large financial concern among both pre-retirees and retirees surveyed was health-care costs. More than half of all respondents noted that health insurance or out-of-pocket prescription drug costs are the primary financial obligations beyond living expenses in retirement.
Seventy-two percent of 50-59 year olds said they are concerned about the escalating costs of health care insurance they may face in retirement. Three-quarters (75%) of 80-89 year olds are currently addressing, or plan to address, financial obligations related to out-of-pocket drug prescription expenses, the release said.
While retirees are experiencing higher than anticipated expenses, they do not plan on reducing spending on desired activities, according to the survey results. Aside from normal living expenses, respondents in their 50s, 60s, and 70s expect to spend up to $600,000 on additional activities.
Estimated spending on domestic travel, international travel, hobbies, charitable donations, luxury items such as a car, home improvements, a second home, and a new business totaled $578,000 for respondents in their 50s, $611,000 for respondents in their 60s, and $652,000 for respondents in their 70s.
The survey was conducted online from April 24 – May 7, 2007, with pre-retirees and retirees, ages 55-59 years old (200 people); 60-69 years old (200); 70-79 years old (201); 80-89 years old (40). All respondents have at least $250,000 in invested assets, and work with financial professionals in making investment decisions.
The full research report, The Expense Reality, can be seen here.