Retirement surprises: What retirees wish they had known

By RetirementFOXBusiness

Many Americans at risk of retiring penniless

FBN's Tracee Carrasco on a survey reporting 42% of Americans have less than $10,000 saved for retirement.

Retirement isn’t exactly as expected for many, with surprises including a younger-than-expected retirement age and higher health care costs, according to the Wells Fargo/Gallup Investor and Retirement Optimism Index.

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Nearly one quarter of retired investors say they stopped working earlier than they’d have liked, which, according to Joe Ready, head of Wells Fargo Institutional Retirement and Trust, is a reason to consider different retirement scenarios in their planning.

“Life events happen, and people don’t always get to choose when they retire — which is why it’s important to have a well thought-out plan that maps out different retirement age scenarios and projected costs in retirement,” said Ready.

The average retirement age of those surveyed was 62, significantly below the age of 70 to which many are being encouraged to continue working to maximize savings and their Social Security benefits. Twenty-seven percent of men, and 19% of women, felt that their retirement age was earlier than they would have hoped.

Many retirees are surprised by the costs they faced in retirement, with health care costs leading the charge. Thirty-seven percent of those surveyed say health care costs have been higher than expected in retirement, 45% say their total health care costs are just what they expected, and just 9% say they have been lower than expected. About one quarter of retired investors say living expenses and taxes have been higher than expected after they retire.

Once retired, many investors still want advice. In the survey, 70% of 401(k) participants would like advice on details such as how to optimize Social Security in retirement.

According to the Wells Fargo survey, very few people are mapping out their retirement plans, with just 20% of those surveyed saying they have done the detailed calculations to determine how much income they will need in retirement, more than half of those surveyed (48%) are unsure or have not thought much about how much money they will need in retirement.

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“Information is power when it comes to retirement,” said Ready. “In this case, doing the detailed planning to calculate projected income and taxes pays off in helping to provide confidence — because investors then know what to prepare for.”

The Wells Fargo/Gallup Investor and Retirement Optimism Index, a broad measure of U.S. investor confidence in the investing climate, showed that retired investors are more optimistic than non-retirees, with index scores of +155 and +134, respectively. Overall confidence remains in line with the readings in the previous two quarters.