Winging It in Retirement?
Saving should be the centerpiece of any retirement plan today. But a new survey indicates that many Americans on the cusp of retiring have given little thought to the other key issues they’ll face in retirement.
A majority of older Americans recently surveyed by the American College of Financial Services, an educational organization for financial professionals, said they have set a goal for how much money to save to “live comfortably” as retirees. And, when asked to assess their own progress, they feel they’re doing a good job of it. Granted, the survey was limited to a select group of about 1,000 people over age 60, all of whom have at least $100,000 in investable assets.
But the financial risks posed by the transition away from full-time work and a regular paycheck are complex and continual – and preparing for them goes well beyond contributing to a 401(k).
Only a minority of people planning their retirement take into account these important financial issues:
- tax considerations (29 percent of older Americans have considered this factor, according to the survey);
- risks that could “undermine” their retirement (29 percent);
- the financial consequences if their spouse dies (34 percent);
- how they’ll deal with changing health and long-term care issues raised by aging (37 percent);
- what their household budget will look like (39 percent);
- the best way to withdraw income from their investments (39 percent);
- how much income their investments will produce over time (40 percent).
The results dovetail with numerous other studies also warning that Americans of all ages are poorly prepared for retirement. One analysis, by the Center for Retirement Research, which supports this blog, shows that 52 percent of all U.S. households are at risk of not having enough retirement income to maintain their pre-retirement living standards.
Retirement – it’s too important to be winging it.
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