retirement consultants

Survey Shows Retirement Money Isn’t What Retirees Expected

These soon to be retired may discover some recent survey data useful. The survey of 2,000 individuals retired within the past two to six years revealed that new retirees are a money-worried, cash-strapped group, and dependent on Social Security mainly because they have inadequate retirement money. This may come as no surprise but there are lessons to be learned. Yet, these retirees experience fulfillment with their new lifestyle. Let’s look at a few of the key conclusions from the data.

Important stats and views of those surveyed

The studied retired people ‘had a median household retirement income of $49,000, but an average (half had more, half less) household income of just $34,000. The group is almost evenly divided between those living better than in their working years and those living on less. About one in five are ‘struggling’ economically.’  Note that one’s experience with financial comfort in retirement can have a lot to do with location. The amount of retirement money required to be comfortable in Newport Beach, California is considerably more than any town in Arkansas.

Just sixteen percent of recent retirees had a formal, written retirement plan although the number utilizing professional retirement consultants increases significantly with assets. Fifty-four percent of those with net worth more than $500,000 have utilized a retirement expert, while just sixteen percent of those with $150,000 or less have done so.’

The majority of participants ‘are concerned about the national financial situation and the stability of government-funded programs. Forty-one percent are very concerned they’ve insufficient savings and will outlive their retirement money. In spite of these economic worries, 84 percent of newly retired people say they’re ‘satisfied’ with their new lifestyle situation. The feeling of fulfillment increases, however, as retirement funds and retirement money climbs.

Those interviewed would be the first generation of workers straddling both traditional defined benefit retirement programs (e.g. life long pensions) and self-directed 401(k) retirement plans introduced in 1981. Traditional pension plans provide, on average, 24 percent of their retirement money; earnings from self-directed retirement programs, as well as additional investments and retirement money, accounts for 11 %. Social Security benefits are by far probably the most essential economic resource, which represents forty-one percent of retirement money of those surveyed

A fifth of participants have an organized withdrawal strategy of their retirement money, and on average, they pull out about 6.7 % a yr. At that rate of withdrawal, retirement money will be depleted in about seventeen years, presuming a portfolio of 40 % stock, 50 % bonds, and 10 % cash at historic rates of return (Trinity Study).

Contrary to the widespread picture of untroubled retired people traveling, learning, and volunteering, their most significant objectives are having secure retirement finances and not stressing too much about retirement money. Spending more time with family members places a distant fourth, followed by traveling and hobbies. Recently retired people aren’t especially interested in returning to school to learn some thing new. However twenty-seven percent of recent retirees would rather be at their old job than retired.

The key point for those intending to retire:

The most important concept off red concerns regrets of the study participants. Seventy percent wish they’d saved much more retirement money and 59% wish they had begun saving earlier.

What was their greatest surprise? It is the imbalance between their financial resources and the high cost of living. More than one-third wish their former employer or retirement plan supplier had done more to encourage them to save sooner and quicker.