Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.
Data & Research September 28, 2023
Few Retirees, Pre-Retirees Seek Advice Despite Financial Security Fears
Only 35% of retirees and 37% of those 50 or older look to a financial professional for advice, Transamerica finds.
Reported by Natalie Lin
Despite fears of declining finances and health, only 35% of retirees and 37% of those aged 50 or older currently consult a professional financial adviser, according to a new survey from the Transamerica Institute and the Transamerica Center for Retirement Studies.
Among workers 50 or older, just 17% said they are very confident they can maintain a comfortable lifestyle throughout their retirement. Based on estimated medians, retirees have saved $73,000 in total household savings, excluding home equity, while workers 50 or older have saved $133,000 in total household retirement accounts.
“Retirees and pre-retirees have limited financial means,” Catherine Collinson, CEO and president of Transamerica Institute and its center for retirement studies, said in a statement. “Both cohorts are susceptible to the turbulent economy and inflation. A harsh reality is that many lack the resources to cover the cost of a major financial shock.”
The greatest retirement fear among pre-retirees is outliving their savings and investments, reported by 45% of older workers, compared with 32% of retirees who said the same.
Meanwhile, 42% of older workers and 39% of retirees fear Social Security will be reduced or cease to exist in the future. Many worry about declining health that requires long-term care (41% and 35%, respectively) and possible long-term care costs (35% and 28%).
Collinson says many retirees and pre-retirees lack financial security due to the increasing societal pressure that workers self-fund a greater portion of their retirement income than in the past. However, many do not have the know-how or resources needed to succeed.
“Their experience is a call to action for policymakers to modernize our retirement system by paving the way for the successful implementation of the SECURE 2.0 Act of 2022 and addressing persistent structural barriers to retirement security, for example by ensuring that all workers have the opportunity to save for retirement in the workplace and requiring that financial literacy be taught in public schools,” Collinson said in the statement.
The survey findings revealed common mistakes hindering more rigorous planning, include being overly optimistic about retirement expectations, overlooking life expectancy and claiming Social Security benefits too early. Other mistakes revealed were taking inadequate steps to safeguard health and failing to plan for long-term health.
The findings came from Transamerica’s 23rd Annual Retirement Survey. A 28-minute online survey was conducted within the U.S. by the Harris Poll on behalf of Transamerica Institute and the Transamerica Center for Retirement Studies between November 8 and December 13, 2022. The firm surveyed a sample of 2,546 workers who were at least 50 years old and employed, self-employed or unemployed but looking for work and a sample of 2,104 who were retired and did not work.
