Those Close To and In Retirement Still Feeling Unprepared
A significant number of retirees and pre-retirees report that they feel unprepared to navigate financial shocks and unexpected expenses, according to a survey from the Society of Actuaries.
The Society of Actuaries (SOA) ninth biennial Risks and Process of Retirement Survey identified an overall increase in consumers’ level of concern for their finances both prior to and during retirement in 2017.
The survey revealed that inflation, health care and retirement costs rank as Americans’ top retirement concerns. Among pre-retirees, 78% selected inflation as a top concern, 74% chose health care, and 73% selected long-term care. Among retirees, the percentages were 57%, 54% and 59%, respectively.
Many pre-retirees state they plan to take a number of steps to protect themselves financially as they age. Seven in ten (70%) state they intend to completely pay off their mortgage, including the 26% who have already done that. Fifty-eight percent have or plan to take less risky investments and 42% have or plan to postpone taking Social Security.
“I am encouraged to see pre-retirees and retirees alike taking steps to mitigate these risks, such as eliminating debt, saving money and cutting back on spending. But I am still concerned that there is not a greater focus on long-term planning, risk management, or dealing with the major uncertainties of life,” says Anna Rappaport, fellow of the SOA and chair of the SOA’s Committee on Post-Retirement Needs and Risks.
A significant number of retirees and pre-retirees report that they feel unprepared to navigate financial shocks and unexpected expenses—61% of pre-retirees and 47% of retirees feel unprepared for expenses in retirement that could deplete their assets. For instance, according to the survey report, only one in three say they could financially handle a 25% drop in their home value, running out of assets or a family member needing financial support. While a majority feel they are prepared to handle small financial shocks, there are still a significant number who would have trouble dealing with car repairs or home repairs.
About half of pre-retirees (51%) say their savings are behind schedule, and one in three (33%) say they are on track.
Most are not currently consulting with a financial professional, but retirees report a moderate amount of interest and pre-retirees a high amount of interest in receiving support and education on a variety of finance-related topics.The online survey of Americans ages 45 to 80 was conducted in July 2017 by Greenwald & Associates on behalf of the SOA.
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