March 6, 2013 (PLANSPONSOR.com) - Affluent Americans may be overlooking critical tenets of retirement planning, according to a new Schwab survey.
One the one hand, more than 84% of investors say they have a retirement plan in place and 80% say they are confident about their financial readiness for retirement. However, when it comes to estimating how much money they will actually need once they retire, respondents say they’ll need on average around $66,000 in income annually, far lower than their current average income that is approximately $115,000.
“Everyone’s retirement saving and investing plan is going to be unique, but each plan needs to start with a realistic assessment of personal situation and goals,” said Carrie Schwab-Pomerantz, senior vice president with Charles Schwab & Co., Inc.
The survey also finds that, on average, respondents plan to work until they are 67 years old and expect to live to the age of 86, suggesting that they anticipate living off their retirement savings for less than 20 years.
Thirty-three percent of affluent investors feel they are completely prepared for retirement, and another 51% feel at least moderately prepared.
People’s sense of retirement readiness seems to provide flexibility in terms of whether or not they will continue working to drive additional income once they retire. Thirty-nine percent of people surveyed say they do not plan to work at all in retirement, and 46 percent say they might work part-time even though they expect to have enough money to live without working. Just 10 percent think they will have to work at least part-time to make ends meet.