Those soon to be retired might discover a latest survey useful. The survey of 2,000 people retired within the past two to six yrs revealed that new retirees are a money-worried, cash-strapped group, and dependent on Social Security because they have insufficient retirement income. Still, they locate fulfillment with their new life. Let us take a look at a few of the key findings.
Key stats and opinions of those surveyed
The examined retired people 'had an average household retirement income of $49,000, but an average (half had more, half less) household revenue of just $34,000. The group is actually equally divided between all those living much better than in their working years and those living on less. About 1 in five are 'struggling' economically.'
The majority of participants 'are worried about financial situation and also the stability of government-funded programs. Forty-one percent are extremely concerned they have inadequate retirement income and will outlive their money. In spite of these financial concerns, eighty four percent of new retired people say they are 'satisfied' with their brand new life situation. Fulfillment raises, however, as retirement savings and retirement income increases.
Those interviewed are the first generation of workers straddling both traditional (defined benefit) retirement programs and self-directed 401(k) retirement programs introduced in 1981. Traditional pension plans provide 24 % of their retirement income; income from self-directed retirement plans, in addition to other investments and retirement income, accounts for 11 %. Social Security is by far probably the most important financial resource, which represents 41 percent of retirement income.'
Just 16 percent of recent retirees had a formal, written retirement program although the number using expert financial consultants rises significantly with assets. Fifty-four % of those with net worth more than $500,000 have utilized a retirement expert, while only 16 % of those with $150,000 or less have done so.'
A fifth of respondents have a systematic withdrawal strategy of their retirement income, and on average, they take out about six.7 percent a yr. At that rate of withdrawal, a retiree's savings will be exhausted in approximately seventeen years, assuming a collection of 40 percent stocks, 50 percent bonds, and ten percent money at historic rates of return [mentioned by study].'
Contrary to the common picture of carefree retirees traveling, studying, and volunteering, their most significant goals are possessing a secure retirement income rather than worrying too much about money. Investing more time with members of the family places a distant 4th, accompanied by traveling and pastimes. Recent retirees aren't especially thinking about going back to school to learn something new. But 27 percent of recent retirees prefer to be at their old job than retired.'
The key factor for those about to retire:
'The money concept carries through on recent retired people 'greatest regrets. 70 % wish they'd more retirement income and fifty nine percent want they'd started economizing earlier.
What was their greatest surprise? It had been 'that they have insufficient retirement income and high expenditures.' More than one-third wish their former employer or retirement plan supplier had done much more to encourage them to save earlier and quicker.'