The study found individuals who have calculated how long their money might last in retirement are more confident they have saved enough money to live comfortably than those who have not. The research also indicated 61% of retirees have someone they consider to be their personal financial adviser, and that retirees with financial advisers are more likely to engage in financial planning.
In addition, retirees with financial advisers tend to have larger amounts of investable assets than those without advisers, and follow their advisers’ advice all or most of the time (74%).
“The Financial Recovery for Retirees Continues” is the third in a series of studies looking at the impact of the 2008 economic downturn on retirees’ finances. The June 2011 survey explored the opinions of 461 retirees who were in the original 2008 and 2009 studies.The most recent survey found that fewer retirees reported feeling less financially secure now than when they first retired (28% in 2011, 49% in 2009). The study reveals that retirees’ confidence levels are approaching levels recorded before the 2008 downturn, when only one-fifth of retirees reported feeling less financially secure than when they first retired.
The study also found retirees have been paying down their debt, with 46% of respondents in the 2011 study having no debt compared to 38% in 2009.
While this might boost feelings of financial security, the fact that an increasing proportion of retirees are not estimating how long their assets might last in retirement (46% in 2011 from 38% in 2008) is a concern for financial professionals. The number of retirees acknowledging their assets and investments need to last at least 20 years has declined 20 percentage points since 2008.
When it comes to risk tolerance, 74% of retirees who manage their own investments describe themselves as conservative, and the vast majority of all retirees (93%) is confident in their investment strategies. "Our research shows that the financial downturn has not had a lingering affect on how many retirees feel about their current financial security compared to when they first retired," said Sally Bryck, associate research director, LIMRA.
The proportion of retirees having to use savings to pay for basic living expenses in excess of income from Social Security and/or defined benefit plans has been stable over time (44% in 2011 compared with 45% in 2008).The study also found there continues to be little interest in purchasing annuities among retirees who do not receive enough income to cover basic living expenses (32% in 2011 compared with 30% in 2008).
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