2022 Spending in Retirement Survey: Understanding the Pandemic’s Impact on the Sources of Retirement Income

Similar to 2020, 7 in 10 said Social Security is a major source of income (Figure 8). Annual household income was positively related to reliance on Social Security as a major income source, where 82 percent of retirees with less than $30,000 in annual household income said Social Security is a major income source, as opposed to 45 percent of retirees with greater than $100,000 in annual household income. Additionally, those who are dissatisfied with retirement and those with poor self-reported health status (a score of 1, 2, or 3 on a scale of 1–10) are more likely to rely on Social Security as a major source of income (85 percent and 83 percent, respectively). 

Median Social Security claiming age was 63 overall and 62 for Black retirees, Hispanic retirees, those with less than $30,000 in annual household income, and those with poor self-reported health status. Retirees living in households with incomes of $80,000 or more reported a median Social Security claiming age of 64. 

Relating to employer-sponsored defined benefit retirement plans, 35 percent of retirees said they are a major source of income, 19 percent said they are a minor source of income, and 46 percent said these plan types are not a retirement income source. Married retirees and those with higher annual incomes were more likely to report defined benefit plans as being a major source of income in retirement. In 2022, fewer retirees reported that a defined benefit or traditional pension plan was a major source of income (35 percent), compared with 2022 (41 percent). Regarding employer-sponsored defined contribution retirement plans, 36 percent reported they are a major or minor source of income, while more than half (64 percent) said they are not a source of retirement income. 

More retirees said personal retirement savings or investments outside of an individual retirement account (IRA) or workplace retirement savings plan was a source of income in 2022 (61 percent) as compared with 2020 (52 percent). Another 46 percent of retirees said an IRA is a source of income. Approximately 18 percent of the sample was retirees aged 72 and older with income sources from tax-deferred savings accounts. Of these retirees, 31 percent said they were not taking a required minimum distribution (RMD) or were not sure, marking an improvement from 2020 where 49 percent of those eligible for the question were not sure (at a time when the RMD age was 70.5). Of the 69 percent who were aware of their RMD activity, the activity was distributed among spending and saving. 

Call us to help you meet your financial goals.

901-435-4250