Data & Research May 18, 2017

Americans Worried About Retirement but Half Not Saving

The lack of retirement savings could in part be due to prioritizing short-term financial considerations, a survey suggests..
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Americans report they are worried about affording retirement, but over half say they aren’t saving money to retire.

The latest COUNTRY Financial Security Index revealed that two in three Americans (67%) report the country’s current events are making them concerned about their financial future. Given this backdrop, it may not come as a surprise the survey also found nearly one-third (32%) worry they either will not be able to retire or will need to delay retirement in the future.                 

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Despite their concerns, more than half of those surveyed (51%) do not include retirement in their long-term financial goals.

The lack of retirement savings could in part be due to prioritizing short-term financial considerations. Americans report they are more concerned about affording unexpected expenses (44%), health care costs (41%) and taking desired vacations (36%) than they are about having adequate retirement savings (32%).

“Many Americans are outliving their assets because they did not include retirement in their long-term financial goals,” says Doyle Williams, an executive vice president at COUNTRY Financial. “We strongly encourage people to develop a long-term plan so they can eliminate the fear of never being able to retire.  By taking some simple steps almost everyone can have a plan in place to secure their financial future.”

With advancements in health care, it is not uncommon for people to spend more years in retirement than previous generations. For planning purposes, COUNTRY Financial suggests a good rule of thumb is to assume living to about age 90 unless health or family history indicate otherwise. Moreover, the desired standard of living during retirement will influence how much money a person will need. The company advises that people plan to have at least 75% of their pre-retirement income to pay for living expenses during retirement.
Data & Research May 18, 2017

Advisers Should Consider Transfer of Wealth in Retirement Planning

Those who have received an inheritance have more positive feelings about retirement.
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People who have received an inheritance from their parents or relatives are more than twice as likely than those who haven’t to feel prepared for retirement (38% versus 17%), according to a survey by the Associated Press-NORC Center for Public Affairs Research.

Twenty-one percent of older Americans have received gifts or loans valued at $10,000 or more from their parents or older relatives. Forty-one percent of older Americans have received or expect to receive an inheritance, and 51% of adults age 50 and older say they have received at least one type of monetary gift or loan from their parent or other relative since turning 18.

Older Americans who have received a financial gift feel they have more choice about when to retire (70% versus 62%). Those who have received an inheritance also say they have saved enough for retirement over the past 10 years (29% versus 12%). Among retirees, those with an inheritance are more likely to say they saved enough in the decade preceding their retirement (57% versus 38%).

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Older Americans with an inheritance are also more likely to believe that their savings will last throughout their retirement (37% versus 21%).

Forty-six percent of people think their parents have a responsibility to provide financial assistance to an adult child if needed. Conversely, 56% of people think an adult child has a responsibility to help their parent with financial assistance if needed. In reality, 31% of adults ages 50 and older have helped their parents or in-laws financially, and 10% of adults older than 50 are currently receiving financial assistance from their family.

The findings are based on a survey of 1,683 people ages 50 and older. The full report can be viewed here.

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