--- title: Older Workers Are Underestimating Their Budgets for Retirement description: Workers approaching retirement age may be misjudging just how much of their budget will go toward basics, a recent report found. authors: - name: Mary Ellen Cagnassola role: Reporter url: https://money.com/author/mary-ellen-cagnassola/ bio: Mary Ellen (M.E.) Cagnassola is a former Money reporter specializing in Social Security and retirement coverage, with a focus on making complex policy accessible to readers. education: Rutgers University, BA Journalism at_money_since: 2021 articles: 205 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Shopping - Taxes former_staff: true editors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. education: University of Florida at_money_since: 2018 articles: 453 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum published: '2024-01-26T15:01:20.000Z' modified: '2024-01-29T18:36:33.000Z' section: Retirement tags: - News word_count: 583 canonical: https://money.com/underestimate-retirement-budget/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Arrows missing the target, with money signs in the background.](https://img.money.com/2024/01/News-Miscalculate-Retirement-Spending.jpg) There’s no perfect formula for a comfortable retirement — but even so, workers approaching retirement age may be majorly underestimating how much they’ll need to budget. A recent [report](https://news.nationwide.com/download/38d66f4d-9b2e-45fa-aaac-b591b7a803e7/nationwide-peakretirementinsights1.2024.pdf?utm_source=NWNewsroom&utm_medium=Newsroom&utm_campaign=NWNewsroom) from the Nationwide Retirement Institute found that the expectations of retirement-age workers don't always line up with the financial realities of those who are already retired. In a survey of 1,000 U.S. adults aged 60 to 65, retired respondents said they spend a lot more on basic expenses than those who are still working predict they’ll need. ## Put a gold-backed IRA into your golden years ### Gold IRAs are similar to traditional retirement accounts, but they are backed by investments in gold and other precious metals, such as silver, platinum, and palladium. To get started, click on your state. [Invest in Gold](https://money.com/pr/g648fe360239?ap_referrer=%2Funderestimate-retirement-budget%2F) ## Retirement expectation vs. reality Judging by the survey’s results, American workers preparing to leave the workforce may be misjudging what their cost of living will be in retirement. Current retirees said they spend 53% of their [budget](https://money.com/retirement-expenses-home-repairs/) on necessities like housing and food, while workers said they expect those expenses to take up just 42% of their income. What’s more, current workers said on average that they plan to retire at 67, but retirees reported exiting the workforce an average of seven years sooner, at age 60. It may not be surprising, then, that current workers' lifestyle expectations don’t match up neatly with what actual retirees reported. While 68% of retirees surveyed said they have “moderately” or “very” comfortable lifestyles, almost a third said they’re not financially comfortable. Among the retirement-age workers who have not yet retired, 77% said they expect to be moderately or very comfortable. Just 23% said they don’t expect to be comfortable. The cost of retirement varies based on factors like location, debt and lifestyle choices, but U.S. Bureau of Labor Statistics [data](https://www.bls.gov/opub/reports/consumer-expenditures/2021/home.htm#:~:text=Consumer%20Expenditure%20Surveys%2C-,2021%C2%A0,-%5B%2B%5DTable%2015) shows that households 65 and older spent an average of $4,345 a month in 2021. ## Take control of your financial future ### Achieve greater financial security by providing effective solutions that can help protect your wealth. Click below to start investing today! [Invest in Gold](https://money.com/pr/x8d3b2086b9d?ap_referrer=%2Funderestimate-retirement-budget%2F) ## The impact of under-budgeting What’s a retiree to do when everyday expenses are eating up so much income? In some cases, go back to work. Roughly 1 in 3 are planning around or actively considering [re-entering the workforce](https://money.com/best-job-search-sites/), according to the Nationwide survey, and 45% of that group said it’s because they’re afraid of running out of money. Smaller swaths said they want to go back to work to add more structure and socialization to their lives. These findings track with a September [analysis](https://money.com/retirees-work-affect-social-security/) from investment management firm T. Rowe Price, which revealed that 20% of retirees are working either full- or part-time. About 48% said it was for financial reasons, and 45% said they’re working for the social and emotional benefits. Social Security shortfalls may be partially to blame for the discrepancies between workers’ budget expectations and the experiences of current retirees: The Nationwide report found that 36% of retirees said their benefits turned out to be less than they expected. With the trust fund that bankrolls Social Security barreling toward insolvency, benefits could be even smaller by 2033 if legislators fail to pass a funding solution. In that event, the Committee for a Responsible Federal Budget, a public policy organization, estimates that retirees could see a universal [23% benefits cut](https://money.com/social-security-benefits-cut-2033/). Almost 75% of retired respondents to the Nationwide survey said such an outcome would impact their retirement “a lot,” and 71% of respondents who are still working said the same. Overall, they’re feeling pretty pessimistic about the public safety net — only 41% of all respondents expect Social Security to exist in its current capacity throughout their retirement. ![](https://s3.consumersadvocate.org/prd/image/image/19305/medium_414558a1-29d4-465e-b5d1-921febc39ed2.png) American Hartford Gold can help you take control of your financial future [Invest in Gold](https://money.com/pr/cdf8db27d320?ap_referrer=%2Funderestimate-retirement-budget%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/underestimate-retirement-budget/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Retirement", "item": "https://money.com/retirement/" }, { "@type": "ListItem", "position": 3, "name": "Retirement Planning", "item": "https://money.com/retirement-planning/" }, { "@type": "ListItem", "position": 4, "name": "Older Workers Are Underestimating Their Budgets for Retirement" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/underestimate-retirement-budget/#webpage", "url": "https://money.com/underestimate-retirement-budget/", "name": "Older Workers Are Underestimating Their Budgets for Retirement", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2024-01-26T15:01:20.000Z", "mainEntity": { "@id": "https://money.com/underestimate-retirement-budget/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/underestimate-retirement-budget/#breadcrumb" }, "dateModified": "2024-01-29T18:36:33.000Z" }, { "@type": "NewsArticle", "headline": "Older Workers Are Underestimating Their Budgets for Retirement", "articleSection": "Retirement", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2024/01/News-Miscalculate-Retirement-Spending.jpg", "width": 2880, "height": 1920, "caption": "News-Miscalculate-Retirement-Spending" } ], "author": [ { "@type": "Person", "name": "Mary Ellen Cagnassola", "url": "https://money.com/author/mary-ellen-cagnassola/", "@id": "https://money.com/author/mary-ellen-cagnassola/#author", "description": "Mary Ellen (M.E.) 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