What financial realities are retirees facing post-pandemic?

A new report from the Transamerica Center for Retirement Studies and Transamerica Institute offers fresh insight into the financial vulnerabilities many retirees face in the wake of the pandemic.

The analysis draws from an online survey conducted between September 14 and October 23 by The Harris Poll on behalf of Transamerica Institute, which included around 2,400 retirees who are no longer working.

According to Retiree Life in the Post-Pandemic Economy, fewer than one in four retirees, or 23 percent, feel very confident in their ability to maintain a comfortable lifestyle throughout retirement.

"Retirement brings freedom and time for personal pursuits," Catherine Collinson, president and CEO of Transamerica Institute, said in a statement. "However, retirees are living on a fixed income with limited financial resources. Many would be unable to withstand a major financial shock, such as the need to pay for long-term care."

The report paints a precarious financial picture for many retirees, noting that the median annual household income for retirees in 2023 was $55,000, with over one-third earning less than $50,000. Meanwhile, median household savings excluding home equity stood at $71,000. Debt remains a priority for 45 percent of retirees, including paying down credit cards, mortgages, and other consumer loans.

Health-related costs pose a major concern, as only 13 percent of retirees are confident they can afford long-term care if needed, and just as few say they carry long-term care insurance. Almost half plan to rely on family and friends for care if their health declines.

Social Security continues to play a vital role, with 58 percent of retirees citing it as their primary income source. However, the median age for claiming benefits is 63 – earlier than the full retirement age of 66 or 67 – resulting in reduced monthly payments.

Looking back on their financial journeys, 76 percent of retirees said they wished they had saved more consistently, while 68 percent noted they would have benefited from better knowledge of retirement saving and investing. Tellingly, 49 percent indicated debt interfered with their ability to save.

"Many retirees may wonder what they could have done differently to save and plan for retirement," said Collinson. "In reality, over their working careers, the world has changed, the retirement landscape has evolved, and the need to self-fund a greater portion of one's retirement income has intensified."