Retiring More, and Liking it Less?

A new report finds that Americans’ satisfaction with retirement is slipping, a finding that transcends economics, gender, and even health.

The report, by the nonpartisan Employee Benefit Research Institute (EBRI), looks at trends in reported retirement satisfaction in the United States over a period of 15 years (1998?2012) using data from the University of Michigan’s Health and Retirement Study (HRS). The report examines the relationship between age and retirement satisfaction by tracking the satisfaction levels of a fixed group of retirees over the same 15-year period (1998-2012) and, unlike earlier reports, finds a shift from “very satisfied” to “moderately satisfied” as people age.

In 1998, a high number of retirees (60.5%) reported that retirement was “very satisfying,” a pattern that held up in the next two survey years (2000 and 2002). However, beginning in 2004, these levels of high satisfaction started to drop and, by 2012, slightly less than half of retirees (48.6%) said retirement was “very satisfying.” At the same time, there was an increase in the share of respondents who found retirement “moderately satisfying” (from 31.7% to 40.9%) and in the share who found retirement “not at all satisfying” (from 7.9% to 10.5%).

And, while those who are better off and those who are healthier tend to be more satisfied in retirement, the study also found a significant drop in the share of retirees who found retirement “very satisfying” among those in the highest asset quartile group as well — an 8.9 percentage point drop, from 75.6% in 1998 to 66.7% in 2012. For the lowest-asset quartile group, the analogous drop in the very satisfied share was comparable, if somewhat steeper: 12.2 percentage points (from 41.1% to 28.9%).

The report notes that both quartiles have seen increases in the moderately satisfied share over the 1998-2012 period—the highest-asset quartile has increased by 9 percentage points (from 21.6% to 30.6%), and the lowest-asset quartile also increased, by 7.5 percentage points (from 42.0% to 49.5%).

Pension Prop?

The EBRI report cited a separate report that found that defined benefit pension annuities were positively correlated with retirement satisfaction, but in considering the current database found similar trends in the movement from “very satisfying” to “moderately satisfying” to be comparable with other groups, suggesting that the drops in the shares of respondents who found retirement “very satisfying” relate to factors broader than the respondents’ level of assets or whether they have pension income.

In contrast to the findings of earlier studies, this study shows that the share of people with “very satisfying” retirement drops with age. Moreover, it found no difference in satisfaction levels of retired men and women.

Age Gauge?

Citing yet another survey that found increases in retirement satisfaction with age, the EBRI researchers found that the share of respondents who found retirement “very satisfying” did indeed increase with age (from 36.5% to 59.2%), while the moderately satisfied share declines a small amount as age increases (from 40.0% to 36.0%), even as the not-at-all-satisfied share decreases more significantly with age (from 23.5% to 4.8%).

The EBRI analysis noted that this result may be surprising to some, since health is one of the key indicators of overall welfare, and health generally declines with age. However, the report explains that cross-sectional data may show that retirement satisfaction increases with age because those who live longer are generally healthier and wealthier, and that, since the sample at older ages is skewed toward those who are healthier and wealthier, that might explain what might otherwise be considered a contradictory result.

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