Research Indicates Retirement Investments Aren't What Retired People had Wished

Those soon to be retired may find a recent survey useful. The survey of 2,000 people retired within the past 2 to six yrs revealed that new retired people are a money-worried, cash-strapped group, and dependent on Social Security mainly because they have inadequate retirement investments. Still, they find fulfillment with their new lifestyle. Let's look at a few of the key findings.

Key stats and opinions of these questioned

The examined retirees 'had an average household retirement income of $49,000, but an average (half had more, half less) household income of only $34,000. The group is almost equally divided between all those living much better than in their working years and those living on less. About 1 in five are 'struggling' financially.'

Most participants 'are concerned about financial situation and also the stability of government-funded programs. Forty-one percent are very concerned they've insufficient retirement investments and will outlive their money. In spite of these economic worries, eighty four percent of new retirees state they are 'satisfied' with their new lifestyle status. Fulfillment increases, nevertheless, as retirement savings and retirement investments climbs.

These surveyed would be the first generation of workers straddling both traditional (defined benefit) retirement programs and self-directed 401(k) retirement plans introduced in 1981. Conventional pension plans offer twenty-four percent of their retirement investments; earnings from self-directed retirement plans, in addition to other investments and retirement financial savings, accounts for eleven %. Social Security is by far probably the most important economic resource, representing forty one % of retirement investments.'

Only sixteen percent of recent retirees had a formal, written retirement program even though the number utilizing professional financial advisors increases significantly with resources. Fifty-four % of those with net worth over $500,000 have utilized a retirement expert, while just sixteen % of those with $150,000 or less have done this.'

In contrast to the common picture of care free retired people traveling, learning, and volunteering, their most important goals are having  secure retirement investments and not stressing too much about cash. Spending more time with family members places a distant fourth, followed by traveling and pastimes. Recent retired people are not especially interested in going back to school to learn something new. However twenty-seven % of recent retired people prefer to be at their old job than retired.'

A fifth of respondents have a systematic withdrawal plan of their retirement investments, and on average, they pull out about 6.seven percent a year. At that rate of withdrawal, a retiree's personal savings will be exhausted in about 17 years, assuming a portfolio of 40 percent stocks, 50 percent bonds, and ten percent cash at historic rates of return [mentioned by study].'

The key factor for those about to retire:

'The money concept carries through on recent retirees 'greatest regrets. Seventy % wish they had much more retirement investments and 59 percent want they had started economizing earlier.
What was their greatest surprise? It had been 'that they have not enough retirement investments and high expenditures.' More than one-third want their former employer or retirement program provider had done more to encourage them to save sooner and quicker.'

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