Americans are most concerned about paying for medical and pharmaceutical expenses in retirement, cited by 31%, according to Franklin Templeton’s “Retirement Income Strategies and Expecations (RISE)” survey. Americans’ second greatest fear is paying off debt (18%) and funding assisted living care (15%).
Forty-six percent do not know how they are going to pay for health care expenses in retirement. Sixty-two percent of younger Gen X women, those between the ages of 38 and 45, are worried about managing retirement income. By comparison, this is true for 45% of older Gen X women, those between the ages of 46 and 53.
Despite these concerns, 67% of Gen X women do not have a retirement income strategy that could last 30 years or more, compared to 55% of Millennial women and 51% of Baby Boomer women who say they lack such a strategy. If they have insufficient income, 58% of Gen X and 60% of Millennial women say they would delay retirement. But only 42% of Baby Boomer women would delay retirement in that circumstance.
Sixty-one percent of Millennial men are worried about short-term market volatility, compared to 40% of Gen X men and 50% of Baby Boomers. However, nearly 30% of younger Millennial men, those between the ages of 20 and 28, would consider a higher growth-oriented investment strategy should they be unable to retire as planned, whereas this is only true for 15% of Gen X men and 7% of male Baby Boomers.
Overall, 33% of Americans are worried about running out of money in retirement, outpacing health care concerns (26%) and having an inactive lifestyle (11%). Forty-nine percent say Social Security will be their top source for retirement income, followed by their workplace retirement plan (41%) and a checking and savings account (27%). While 62% say working with an adviser is critical for retirement planning, only 29% are actually working with one.
“This year’s RISE survey findings really highlight how individualized a person’s retirement savings plan needs to be,” says Michael Doshier, vice president of retirement marketing at Franklin Templeton Investments. “The differences between generations, even among those of the same gender, show that comprehensive retirement planning requires a holistic view that incorporates demographic differences and short-term risk tolerances, as well as long-term goals.”The RISE survey was conducted online among 2,002 adults in January by ORC International’s Online CARAVAN.