From Time Inc.:

Workers approaching retirement age may be underestimating how much they’ll need to budget. Current retirees said they spend 53% of their budget on housing and food, but workers expect those expenses to only take up 42% of their income. In some cases, retirees are returning to work due to financial shortfalls or Social Security benefit discrepancies.

The Nationwide Retirement Institute found that the retirement expectations of workers don’t always align with the financial realities of current retirees. On average, workers plan to retire at 67 but actual retirees reported exiting the workforce at age 60. Those who are still working believe their retirement lifestyle will be comfortable, but almost a third of actual retirees do not feel financially comfortable.

Households 65 and older spent an average of $4,345 a month in 2021, according to U.S. Bureau of Labor Statistics data. The Nationwide survey found that almost 75% of retirees believe a potential 23% cut in Social Security benefits in 2033 would greatly impact their retirement, and 71% of workers agreed. Only 41% of all respondents expect Social Security to exist in its current capacity throughout their retirement.

Retirees returning to work are often doing so due to financial reasons or to seek social and emotional fulfillment in their lives. Social Security shortfalls may be contributing to the discrepancy between workers’ budget expectations and retirees’ experiences. The impact of this under-budgeting on the retirement population is significant, with many retirees feeling pessimistic about the future of Social Security benefits.



Read more: Retirees Spend Over 50% of Their Budget on Basic Expenses