NEW YORK (MainStreet) Retirement is not something to be feared. Sure, in our working years we worry about how it might all work out. But by and large, retirees are living on less and are quite contented, according to new data compiled by T. Rowe Price. The national sample of 1,507 retirees have been in retirement for one to five years and have a rollover IRA, or an account balance in their 401(k) plan.
While many advisors suggest targeting a retirement income that is 80% of your working life wages, individuals nearly three years into retirement report living on an average 66% of their pre-retirement income. And they're not roughing it. Well more than half (57%) say they live as well -- or better than when they were working. A large majority (85%) even admit, "I don't need to spend as much as I did before I retired to be satisfied."
The pressure of "keeping up with the Joneses" is off for these retirees, of which nearly two-thirds (65%) say they enjoy their thriftier lifestyle. And most (89%) are somewhat or very satisfied with retirement so far.
But these recent retirees were prepared for life after work with median household assets (investable assets plus home equity minus debt) of $473,000 nearly half (48%) have a nest egg of $500,000 or more.
Interestingly, Social Security accounted for almost half (43%) of their income. The second largest source of income was a pension plan (19%), followed by personal savings and investment accounts including IRAs and 401(k) plans (18%).
More than a few retirees are working at least part-time (16%), while 14% are retired but looking for a job.