More than one third of retirees said they found their expenses in retirement to be higher than they had expected before retirement, according to a recent survey taken in March 2020.
The survey, conducted by the Employee Benefits Research Institute, asked retirees were how their expected lifestyle and expenses compared with what they actually are. When asked how their overall lifestyle in retirement was now compared with how they expected it to be before they retired, 28 percent of retirees said it was much better or somewhat better than expected.
This percentage was unchanged after the onset of the COVID-19 pandemic at 32 percent. While 34 percent of retirees both before and after the pandemic onset said that overall expenses were higher than they expected, certain expense categories had an increased share of retirees reporting that they were higher than expected after the pandemic onset.
In particular, long-term care expenses; spending to support other family members; and travel, entertainment, or leisure were more likely to be reported as higher than expected after the onset of the pandemic (see chart below).
Retirees’ Expectations About Expenses