The latest Spending in Retirement study from the Employee Benefit Research Institute (EBRI) reveals a concerning trend for retirees, with many struggling to make ends meet due to rising credit card debt, insufficient savings, and inflationary pressures.
The big picture: The survey found that retirees’ well-being and satisfaction are declining, while outstanding credit card debt has surged. A significant number of retirees are cutting back on spending to make their savings last.
- Lifestyle misalignment: Retirees rated their alignment with preretirement lifestyle expectations at 5.7 on a 10-point scale, down from 6.8 in 2020. Satisfaction with life in retirement also dropped, with a rating of 6.9 compared to 7.4 four years ago.
- Higher spending than affordable: In 2024, 31% of retirees said their spending is more than they can afford, up from 27% in 2022 and 17% in 2020. Many are struggling to balance living costs with their savings.
- Debt struggles: 68% of retirees reported having outstanding credit card debt in 2024, a sharp increase from 40% in 2022.
By the numbers: Half of the retirees say they saved less than needed for retirement, while only 17% believe they saved more than necessary. Moreover, 58% of retirees retired earlier than expected, often due to health issues or company changes.
What they’re saying: “A lack of sufficient savings and retirement preparation negatively influences retirees’ spending outlook,” said Bridget Bearden, Ph.D., research strategist at EBRI. “These spending constraints contribute to declining levels of well-being in retirement.”
Be smart: For collection agencies, understanding these financial pressures is critical as retirees are increasingly less likely to have the means to repay debts. Rising credit card balances, declining satisfaction, and diminished savings show that many are in survival mode, trying to stretch limited resources.
