Living Expenses Exceed Expectations of Many Retirees, Study Says
A substantial number of retirees are spending more than they expected to on living expenses — and their confidence in being able to meet their lifestyle goals in retirement is taking a hit, says a recent study.
Retirees are spending more than they expected since they left the workforce in a variety of areas, according to the LIMRA Secure Retirement Institute
. Two-thirds of their expenditures were for basic living expenses and health care and long-term care (LTC) costs, and many underestimated what they would spend in those areas. Specifically:
- 26% said their basic living expenses in retirement were higher than they expected; and
- 40% underestimated their expenses for health care and long-term care.
Those higher-than-expected expenses, not surprisingly, hurt many retirees’ confidence in their ability to have the lifestyle they anticipated. LIMRA says that 60% of those who miscalculated their basic living expenses were not confident that their lifestyle would meet their expectations. And almost one-third of those with higher than expected expenses for health care and LTC lost that confidence.
LIMRA also found that the results were more pronounced for women than for men. And given that women’s average life expectancy is longer than men’s, that is a bit more ominous for them. Accordingly, LIMRA found, far fewer women than men are confident that their financial resources will last if they live to age 90 — 49% of men were confident about that, but only 36% of women were.