Forty-two percent of non-retired investors said they have lowered their expectations for the lifestyle they will have in their senior years
Retirement planning is taking a backseat to vacation planning amongst investors, according to a new poll.
When compared with a list of common pursuits, retirement planning ranks third behind planning vacations and exercising at the gym; not bad, but it’s an area not getting the focus it deserves, according to the BlackRock Investor Watch, which surveyed nearly 700 investors with more than $250,000 in investible assets.
Forty-two percent of non-retired investors said they have lowered their expectations for the lifestyle they will have in their senior years, while half said they have either pushed back their retirement date or are unsure when they will retire.
Complicating their retirement planning is an apparent misunderstanding or underestimation of financial realities of retirement. Fifty-one percent of non-retired investors said they know how much to save to ensure that their savings sustain them throughout their retirement years, while 37 percent said they are not confident they will achieve the annual income they need for the years they expect to be in retirement.
About one-in-three expect to spend less than 15 years in retirement, despite the fact that, according to mortality estimates, a healthy couple aged 65 in the U.S. has a 50 percent chance at least one of them will live to be 92. This translates to 27 years of retirement.
“It’s understandable that investors are not paying as much attention to retirement as they ought to, given today’s market uncertainty in addition to questions about how much they will need, how long they will live or where to invest,” said Frank Porcelli, head of BlackRock’s U.S. Retail Business, in a statement. “But investors don’t have to lower expectations for life after retirement. One of the most important steps they can take is to fully educate themselves about the facts of retirement and then ensure that their savings and investment strategies are fully aligned with those needs.”
The BlackRock survey finds that many investors do not consider themselves knowledgeable about retirement income generators. While 63 percent said they are familiar with income generating investments, a majority, both retired and non-retired, mis-iidentifed several such investments, including municipal bonds, government bonds, money market funds, and corporate bonds.
Four-in-ten of of non-retired respondents said they plan to be “risk averse” in their retirement investing, while another four-in-ten said they don’t think there is “a safe way to invest for retirement.”
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.