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What Will Retirement Really Look Like?

How you imagine retirement and what it will really look like may be different. Comparing your ideas with the experiences of others may help prevent surprises.


Key Takeaways

For many retirees, retirement doesn’t look the way they imagined.

An important strategy for enjoying retirement is to plan with realistic expectations.

Hearing the reality of current retirees may help you avoid retirement surprises.

Hopes Before Retirement

Retirement has long been hailed as the ultimate achievement after a lifetime of working. However, people's perceptions of the "golden years" have changed. For many Americans, concerns about how long their retirement money will last and whether they can maintain their current lifestyle are now the norm.

In addition, pre-retirees' expectations about when they will retire may actually play out differently than anticipated. This has been true since COVID-19, but also not necessarily directly a result of the pandemic.

One study noted that people expect to retire later and at an older age than they do. Factors such as health (yours or a loved one's), wealth, age, marital status change, mortality expectations and major illness diagnoses all play an essential role in determining when someone actually retires—and often it's sooner than expected.1

Let's look at what people say about their hopes for retirement in our latest national retirement research and see if your expectations align. Despite acknowledging savings challenges, overall, pre-retirees (those still working) ages 25 to 65 are still looking forward to their retirement years.

What Concerns You About Saving for Retirement?

While still committed to saving for their eventual retirement, today's retirement plan participants seem to have more financial worries than just a few years ago.2 Bumps in the road wrought by today's market volatility, the highest inflation in years and interest rate hikes present more than the usual challenges to saving and planning. Personal bills and debt remain challenging, but worries about volatility have risen.

What Keeps Today's Savers Up at Night?
  • 64% of retirement plan participants are concerned about inflation and interest rates.

  • 41% say market volatility causes great worry or keeps them up at night.

  • 37% say they're apprehensive about housing expenses.

Source: 10th Annual Retirement Survey of Plan Participants, American Century Investments, 2023.

Better, Worse or the Same?

When asked about the standard of living they expect in retirement, one in three respondents anticipated that they'll live better in retirement than they do now. However, the older you are, the less likely you are to be that optimistic.

How do you expect your standard of living to be?
  • 33% of retirement plan participants expect their standard of living to be a little better or much better in retirement than it is now.

  • 50% of millennials expect their standard of living to be better in retirement, driving the overall increase.

  • 42% of pre-retirees expect their standard of living in retirement to be about the same.

  • 25% expect their lifestyle in retirement will be a little worse or much worse than it is now.

Source: 10th Annual Retirement Survey of Plan Participants, American Century Investments, 2023

Five Retirement Surprises

While not many retirees complain about life after quitting work, they report some surprises. Reviewing these can help you avoid your own retirement "gotchas."

1. You may retire earlier—but not by choice

According to a recent retirement survey,3 about half of those surveyed retired earlier than expected for reasons beyond their control, such as job loss, health issues or the need to care for a spouse or family member. And although 73% of pre-retirees believe they will work at least part-time in retirement, only 30% of retirees are working now, according to the same survey.

If you end up retiring earlier than planned for unexpected reasons, you may want to consider ways to make money in retirement.

2. You may be busier—and you need people

Retirees report that they are much busier than they thought they would be. Filling your time may be critical to happy retirement and health, but don't discount the human connection. According to an 85-year Harvard study, one key to happiness in retirement is cultivating and maintaining relationships with others.4 Staying busy is good, but it may not be enough without other people.

3. You may spend more, especially at first

The traditional rule of thumb says you need to have 70% to 80% of your current salary to maintain your current lifestyle in retirement. However, with ongoing inflation, many retirees may now need more. Also, consider that with your extra time, you may spend more on extra vacations, new hobbies or other adventures in your golden years. Be sure to include these in your retirement budget.

Surprisingly, many retirees spend more during the first few years of retirement than they did while working. Data from the Bureau of Labor Statistics also supports this. However, as you move through the stages of retirement, you might find yourself spending less.

4. You may need time to adjust

Some workers expect to gradually transition into full retirement rather than choosing a specific date. This can be a good thing if you can do it. Moving from full-time work to full-time free time can be a difficult adjustment.

Many retirees report feelings of boredom and a loss of purpose—but taking time to find purpose through a new skill or interest can help you adjust. Retirees with purpose are often happier and healthier and may even live longer.5 Defining your purpose for those years in retirement planning may help your years after working be more fulfilling.

Planning your time in retirement should be done with your significant other. The adjustment period can be more challenging if you both retire simultaneously. Some ideas for the transition include reducing your workload, taking on favorite parts of the job or moving to part-time if possible. A part-time job that has nothing to do with your career or is volunteer-oriented may be fulfilling.

5. Expenses can catch you off-guard

Many retirees are surprised by the price tag of essentials such as health care, home maintenance and car maintenance. They may also be unaware that Medicare does not cover all costs—including long-term care. Others may not have anticipated the costs of repairs, especially if you've already deferred home maintenance that needs addressing.

These may be especially important to plan for if you also carry debt in retirement. While it's not the end of the world to still owe creditors, the more you can pay down debt before retirement, the more money you may have to cover your necessary expenses.

It also may be a good idea to take care of maintenance before your last paycheck. If you can afford it, consider upgrading to newer cars or performing necessary maintenance on current ones, tackling home repairs or desired remodeling, and replacing older appliances and home water heaters or HVAC systems.

Plan for Surprises

Learning from the experience of others is wise for any situation, but especially for the essential things you can know from current retirees. How can you sidestep surprises in your retirement? Check your expectations and create a plan that covers all aspects of life—emotionally, physically and financially.

If you need help with the financial part, our financial advisors are here for you. Aside from planning, an advisor can help point out gaps, determine tax and withdrawal strategies or confirm you're as prepared as possible.

Don't leave room for financial surprises in retirement.

Let us help you plan.

(How) Has COVID Changed Retirement Expectations? National Association of Plan Advisors,, July 2023.

Should Retirement Investors Target 100% Income Replacement Instead Of The Traditional 80%?, February 2023.

2022 Retirement Confidence Survey Fact Sheet #2, Expectations About Retirement, Employee Benefits Research Institute, September 2023.

An 85-year Harvard Study on Happiness Found the No. 1 Retirement Challenge That 'No One Talks About,', March 2023.

We All Need Purpose When We Wake Up in the Morning': Finding Meaning in Retirement Leads to Happiness and Health, MarketWatch,, July 2023.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

You could lose money by investing in a mutual fund, even if through your employer's plan or an IRA. An investment in a mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.