Less than half of affluent investors have received retirement planning advice from their financial advisor.
National Save for Retirement Week begins Monday, and not a day too soon.
Americans’ confidence in their ability to retire comfortably is “stagnant at historically low levels,” according to the Employee Benefit Research Institute’s 2012 Retirement Confidence Survey. Just 14 percent of respondents said they are very confident they will have enough money to live comfortably in their senior years.
Even in Millionaire households, retirement issues are a heightened concern. A first quarter Millionaire Corner wealth level study of households with a net worth between $1 million and $4.9 million (not including primary residence) found that almost half (48 percent) of respondents said they were primarily concerned with having enough money to last them through their retirement years, up slightly from 2011. Forty-four percent said they are concerned whether they will be able to retire as planned.
Concern over retirement savings is heightened about young Millionaire baby boomers ages 45-54, nearly two-thirds (61 percent) of whom fret about whether they will have sufficient retirement savings. Similarly, 61 percent of these households are worried about whether they will be able to retire as planned.
The EBRI study is especially dire when it comes to retirement savings. Sixty percent of workers report that the total value of their household’s savings and investments, exclusing their primary home and any defined benefit retirement plans, is less than $25,000.
The economic collapse has caused many households to delay life events, including retirement. In 1991, 11 percent of workers said they expected to retire after age 65. By 2012, EBRI found, that has increased to 37 percent.
But when it comes to planning for retirement, less than half of affluent households (41 percent) with a net worth between $100,000 and $1 million (NIPR) say that their financial advisor has given them advice on the topic, our research found. In comparison, almost half (49 percent) of Millionaires we surveyed said they had received retirement planning advice.
Almost four-in-ten of those younger than 45 and between the ages of 45-54 said that at the present time they are not saving enough to meet their financial goals.
The U.S. Department of Labor offers 10 basic ways to prepare for retirement:
1. Start saving, keep saving, and stick to your goals
2. Know your retirement needs
3. Contribute to your employer’s retirement savings plan
4. Learn about your employer's pension plan
5. Consider basic investment principles
6. Don't touch your retirement savings.
7. Ask your employer to start a plan
8. Put money into an Individual Retirement Account
9. Find out about your Social Security benefits
10. Ask Questions
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.