Retirement & Financial Planning Report

Retirees with regular income from a pension or annuity are much less likely to outspend their income than those without such income, according to a report that underscores the importance of those benefits.

The Employee Benefit Research Institute found that 34 percent of retirees with defined benefit programs (the CSRS and FERS civil service annuities are such programs) outspent their ongoing income while that was true of 46 percent of those without such benefits. It said that difference is a concern as such benefits grow rarer in the workplace and increasing numbers of people enter retirement without them.


Those were among findings of a study of retiree spending patterns in general that also found that:

• the average single retiree spent 86 cents of each dollar of ongoing retirement income while the average retired couple spent 80 cents;
• those in the lowest quartile of wealth spent an average of $1.31 for every dollar in income while those in the top quartile spent just 63 cents;
• for households running a deficit, a common reason is medical expenses; and
• housing-related expenses accounted for 48 percent of total expenditures for retired households, slightly below the 52 percent for those still working;