Debt a Key Indicator of Unhappiness in Retirement, Survey Finds

March 3, 2021

Retirees who have debt—especially at the level they consider unmanageable—are the least satisfied with their retirement although financial concerns are common even among those without debt, the Employee Benefit Research Institute has found.

A survey of 2,000 people age 62 and up, almost all of whom were retired, found that two-thirds reported their standards of living as the same or higher as when they were working but only a fifth said they had saved more than they needed for retirement while half said they had saved less than needed.

The survey also found that most don’t want to spend down even a significant portion of their assets in retirement, mainly out of concern about unforeseen costs arising in the future, followed by a view that a spend-down was not necessary, desire to leave as much as possible to heirs, the security of having large savings, and fear of running out of money.

However, only a quarter “scored their current life in retirement as highly aligned with how they expected or planned for their life in retirement to be,” EBRI said.

“Those least satisfied with retirement were those with unmanageable or crushing debt: More than 4 in 10 (42 percent) in this category registered below-average satisfaction with retirement,” it said.

“Indeed, those with unmanageable debt scored poorly by almost every measure, including lower life expectancy, less ability to spend within their means, retirement being costlier than expected, finding themselves forced to dip into savings during poor market conditions, and lack of alignment between retirement expectations and reality.

“Other cohorts who showed signs of strain in retirement include those who are unmarried, those who have fair or poor health, or those with low household income,” it added.