At a time when many workers are being encouraged to work to age 70 to increase their opportunity to save and to maximize their Social Security benefit, the Wells Fargo/Gallup Investor and Retirement Optimism Index poll finds that the average age at which current retirees retired is 62. Nearly a quarter of these (22 percent) say they retired earlier than they would have liked, with men (27 percent) more likely than women (19 percent) to have retired earlier than they say was optimal.

Many retired investors say they are surprised by the high costs they have encountered in retirement. When asked how various costs in retirement compare to their expectations, 37 percent say their total healthcare costs have been higher than expected, the most for any expense tested in the poll. Just 9 percent say these have been lower than they expected, and 45 percent say their total healthcare costs are just what they expected.
In addition, about a quarter say their everyday living expenses (27 percent) and taxes (26 percent) have been higher than they expected. Only 11 percent and 10 percent, respectively, say everyday living expenses have been lower.
“Life events happen, and people don’t always get to choose when they retire — which is why it’s important to have a well thought-out plan that maps out different retirement age scenarios and projected costs in retirement,” said Joe Ready, head of Wells Fargo Institutional Retirement and Trust. “This will help people who are saving for retirement make the most informed decisions possible.”
The Wells Fargo/Gallup Investor and Retirement Optimism Index is a broad measure of U.S. investor confidence in the investing climate. Retired investors remain more optimistic than non-retirees, with index scores of +155 and +134, respectively, which is similar to their confidence levels in the two prior quarters. The first quarter Investor and Retirement Optimism survey was conducted Feb. 12–25, 2018. Among investors surveyed, 68 percent are invested in a 401(k), including 75 percent of non-retirees and 51 percent of retirees. 
Room for improvement in retirement preparation
Despite non-retirees’ lack of certainty about their retirement security, few have done the detailed calculations needed to determine what their actual financial needs will be in retirement:
• Twenty percent say they have done the detailed calculations to determine the amount of income they will need in retirement, 32 percent have estimated it, and 48 percent are unsure or have not thought much about it.
• Twenty percent say they have done the detailed calculations to estimate the amount of income their retirement accounts will potentially generate for them in retirement, 33 percent have estimated it, and 47 percent have done neither.
• Eleven percent have done detailed calculations to estimate how much they will potentially need to pay in taxes on their retirement income, 22 percent have estimated it, and 67 percent have done neither.
About half of non-retired investors who have done the detailed calculations for each aspect of retirement say they are highly confident they will have enough money to maintain their preferred lifestyle in retirement. By contrast, just about one in five non-retired investors who have not done these calculations report high confidence in maintaining their lifestyle in retirement.
“Information is power when it comes to retirement,” said Ready. “In this case, doing the detailed planning to calculate projected income and taxes pays off in helping to provide confidence — because investors then know what to prepare for.”
Help wanted in 401(k) plans
The vast majority (92 percent) of investors who participate in 401(k) plans are satisfied with their plans, and investors are keenly interested in additional services that could be offered in 401(k) plans. 
“As the 401(k) plan is the most common way for people to save and invest for retirement, it makes sense that people would like to access more extensive retirement-planning features, such as advice that factors all of their assets into their retirement income estimates and asset allocation strategy,” said Ready. “That’s the next step in the retirement industry — to help participants get the answers they need to their complex retirement income and distribution questions.”
One possible improvement could give investors the option of purchasing professional advice through their 401(k) plans. The Wells Fargo/Gallup Investor and Retirement Optimism Index finds non-retired investors interested in a wide range of professional advice and services that could be offered through such a plan:
• 70 percent of non-retirees with a 401(k) are interested in receiving advice on how to optimize their Social Security benefit in retirement.
• Roughly six in 10 are interested in receiving professional advice on developing a retirement income plan (62 percent) and being able to customize target date funds to the exact year they plan to retire (58 percent).
• More than four in 10 non-retired investors are interested in the following: getting advice that is based on all of their assets, not just their 401(k) plan (44 percent); having their investments automatically rebalanced each year to match their target asset allocation (44 percent); and receiving advice for how to allocate their 401(k) assets (41 percent).
About the Wells Fargo/Gallup Investor and Retirement Optimism Index 
These findings are part of the Wells Fargo/Gallup Investor and Retirement Optimism Index, conducted Feb. 2–25, 2018, by telephone. The index includes 1,321 investors, aged 18 and older, randomly selected from across the U.S. with a margin of sampling error of +/- 3 percentage points. For this study, the American investor is defined as an adult in a household with total savings and investments of $10,000 or more. About two in five U.S. households have at least $10,000 in savings and investments. The sample size consists of 71 percent non-retirees and 29 percent retirees. Of total respondents, 36 percent reported annual incomes of less than $90,000; 64 percent reported $90,000 or more. The Wells Fargo/Gallup Investor and Retirement Index is an enhanced version of Gallup’s Index of Investor Optimism, which provides the historical trend data. The median age of the non-retired investor is 47 and the retiree is 69.
The Index of Investor Optimism had a baseline score of 124 when it was established in October 1996. It peaked at +178 in January 2000, at the height of the dot-com boom, and hit a low of -64 in February 2009.