A new study by the Consumer Financial Protection Bureau today found that just over half of retired Americans who retired between 1992 and 2014 were able to maintain their same level of spending for five years after retiring. Fifty-one percent of retirees said they were able to maintain spending levels by relying either on their retirement income alone or by combining it with savings or other non-housing assets. Among those who were not able to maintain their spending levels, the average retiree reduced their spending by an average of 28% between their first year of retirement and their sixth.
The study found that retirees’ decisions about debts, pensions and Social Security factored into their ability to maintain their level of spending. The CFPB observed that retirees able to maintain spending levels were more likely to not have a mortgage or other debt, have a traditional pension taken in monthly payments and claim their full or maximum Social Security benefits, rather than taking an early distribution.
