Tight budgets prevent retirees from enjoying their lives

Only a third of retired people say a shortage of money never prevents them from doing the things they would like to do.

The latest report from the Irish Longitudinal Study on Ageing (Tilda) focuses on the relationship between retirement income and quality of life.

Examining 8,000 people aged over 50 in Ireland, the research found individuals in households with higher incomes experience a higher quality of life.

The report focused on 325 people who transitioned into retirement during the survey period between 2009 and 2015 and found it is actual income in retirement, rather than the proportionate change in someone’s income from that received before retirement, affects quality of life.

Individuals in the highest bracket of income scored on average 29.6 on a quality of life measure compared to an average quality of life score of 26.2 for individuals in the lowest income bracket.

The report suggests that those with the highest income score 13% higher for quality of life than those with the lowest.

Just under a third of retirees said “shortage of money never prevents them from doing the things they would like to do”, while around 13% said a “shortage of money often prevents them from doing the things they would like to do”.

However, almost 20% of retirees in the lowest income bracket reported a shortage of money often stops them from doing the things they want to do compared to only 3% of those in the highest income range.

For retirees in the lowest income bracket, 25% said a shortage of money never stops them from doing the things they want to do compared to 40% of those in the highest income range.

Retirement income replacement rates were also found not associated with quality of life post-retirement.

The retirement income replacement rate is expressed as the ratio of post-retirement pension income to pre-retirement labour income

The study found it is the income, pre- and post-retirement, that relates to the quality of life, not the rate at which their income changes or the relative proportion of income they maintain from pre-retirement into retirement.

Tilda research fellow and lead author of the report Irene Mosca said the finding that money is not deemed important to most retirees may be attributed to the fact that consumption patterns change over time.

“Compared to when in employment, retirees are more likely to have more time to shop around, to have paid off their mortgage, to have fewer dependants and not to have to save extra for their retirement,” said Dr Mosca.

“Overall, the findings of this report suggest that it is the income that people are on, pre and post retirement that affects their quality of life, not the rate at which their income changes.”


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