Retirees Spend Less, Turn to Advisers

The number of retirees who say they are worried about financial security has more than doubled in the past year, and many are tightening budgets or seeking professional financial advice, a new survey found.

The survey was conducted by LIMRA, the Society of Actuaries (SOA), and the International Foundation for Retirement Education (InFRE).

LIMRA Associate Research Director Sally A. Bryck, who led the research project, said in a press release that seven in 10 respondents said they can still cover their basic expenses and afford a few extras, but the number who said they spend money on whatever they want dropped from 38% in 2008 to 22% in 2009. In addition, 61% of respondents reported they have a personal financial adviser compared to 56% who said so in 2008.

The survey of retirees aged 56 to 77 with $100,000 or more in investable household assets also found a significant decline in the number of retirees who feel very confident they have saved enough money to live comfortably throughout their retirement. Only one in four retirees indicated they are extremely confident they have saved enough, a 12% drop year over year.

Forty-three percent of the retirees surveyed said their tolerance for investment risk has gone down since last year, citing the following main reasons:

  • concern about the economy (79%)
  • concern about future inflation (45%)
  • not enough time to recover from the economic downturn (39%)
  • change in house value (28%).

The survey report, “What a Difference a Year Makes,” is available here.