May 11, 2023

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. 

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