Retirees ‘Staying Alive’ But Lack Confidence

Retirees and pre-retirees lack confidence in making their retirement money last, and only one-fifth have discussed spending in retirement with a financial adviser.

The majority of respondents (55%) in a survey by Thrivent Financial Lutheran are still unsure of how much money they will need to last throughout retirement. Lower-income retirees have a drastically worse idea than higher-income retirees (29% verse 65%).

In fact, Staying Alive is the movie that best represents the barely-above-water finances for 41% of the retirees and pre-retirees, age 60 to 74.

That was certainly the plurality over the retirement movies “Easy Money,’ for those above water (6%) ; “Rags to Riches’ (13%), for those thriving in retirement; “Nine to Five,’ for those working in retirement (7%); and “Money Pit,’ for those depleting their retirement fund at a faster rate than anticipated. (One-fourth answered “not sure.’)

Adviser Rescue

Only 22% of retirees said that they have worked with a financial adviser in the first two years of retirement to discuss spending. For those that did, an overwhelming majority (95%) found it helpful.

The study suggests retirees’ spending miscalculations could be a lack of a financial plan. The number of retirees drawing down their savings and assets at the rate they expected in retirement (32%) is not much more than those drawing at a faster rate than expected (25%).

Despite these staggering statistics, the survey found that 61% of the respondents do not worry and rarely think about having enough money in retirement. More than a quarter (28%) are spending more in retirement than anticipated.

“This generation has taken a hands-off approach to saving and spending planning when in retirement,” said Mark Anema, vice president of accumulation and retirement income solutions for Thrivent Financial, in a press release about the survey. “But the reality is that this generation can’t afford to take chances because they often don’t have the pension plan or other secure income their parents may have had to ensure they are not destitute in old age. The financial planning process doesn’t end at 65.”

On a happier note, couples in retirement can agree on money matters: 7 in 10 fully agree about spending money in retirement (but an unlucky 5% quarrel frequently over money management).

The “Living in Retirement’ survey, conducted in December 2007, was to gauge how retirees manage their income throughout retirement. Most of the 800 respondents (64%) were fully retired, 16% were “partially’ retired, and 20% were not yet retired.