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Kim Butler

Partners for Prosperity, Inc.

City:Mt. Enterprise

State: TX

I have 20+ years of handling alternative investments in cash, growth and income for clients nationwide.  I strive to help my clients with all things financial in every way possible over the phone and the web.  I own an alpaca farm which I enjoy working during my downtime.  I also enjoy gardening, writing and reading books.  I also train other advisors on Prosperity Economics.

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Education vs. Retirement: The Saving Conundrum

More than four-in-ten Affluent Americans (43 percent) surveyed by Spectrem’s Millionaire Corner cite “running out of money in retirement” as their biggest financial fear.

| BY Donald Liebenson

For many Americans, the prospect of retirement looms large and foreboding, More than four-in-ten Affluent Americans (43 percent) surveyed by Spectrem’s Millionaire Corner cite “running out of money in retirement” as their biggest financial fear.

This concern escalates with age. For one-fourth (26 percent) of respondents under the age of 40, concern about running out of money in retirement is on par with losing their job. But outliving one’s retirement savings is the paramount fear of those ages 41-50 (40 percent), Baby Boomers ages 51-60 (44 percent) and those 61 and up (46 percent).

Eighty-five percent of Americans think they need to make short-term sacrifices to save for the long-term, according to a new survey by TheStreet, but almost half (44 percent) worry that they are not doing enough to financially plan for retirement.

Not surprisingly, wealth level is a factor in concern about retirement income. While 89 percent of wealthy households with a net worth of at least $5 million (not including primary residence) are confident they will have sufficient income to live comfortably during retirement, that percentage drops to 58 percent of non-Millionaire households with at least $100,000 net worth, according to Spectrem’s Millionaire Corner wealth level studies.

Similarly, nearly three-in-ten non-Millionaires surveyed by Millionaire Corner report that at the present time their household is not saving enough to meet their financial goals. In comparison, just 9 percent of Millionaire households with up to $4.9 million net worth responded similarly. Accordingly, six-in-ten non-Millionaires express concern about being able to retire when they want to vs. 44 percent of Millionaires.

So what are they doing to alleviate their concerns about planning for retirement? According to TheStreet survey, 40 percent of Millennials would rather live the life they want to now than worry about saving for retirement. Conversely, almost half (46 percent) of Millennials do worry that they’re not doing enough to financially plan for retirement, while three-in-ten are not confident they will have enough money to live comfortably in retirement.

Among non-Millionaires in the Millionaire Corner study, 58 percent report receiving retirement planning advice from their primary advisor (44 percent) or someone other (14 percent). Almost two-thirds (63 percent) of Millionaires said they, too had received professional retirement planning advice from a primary advisor (50 percent) or someone other (13 percent).

One planning for retirement conundrum for parents is weighing the demands and challenges between saving for retirement and their child’s education. Affluent Americans rank education second only to hard work as the primary factor in their success, One-third of non-Millionaires surveyed by Spectrem’s Millionaire Corner rank financing their child’s education as a priority concern. This percentage surges to 61 percent for respondents who are under the age of 44.

College costs continue to outpace inflation. The average cost of tuition and fees for the 2013–2014 school year was $30,094 at private colleges, $8,893 for state residents at public colleges, and $22,203 for out-of-state residents attending public universities, according to the College Board.  Retirement costs are less defined and are dependent on several factors, ranging from the solvency of Social Security to where one chooses to live their senior years, making a retirement income calculation imperative.

But Affluent investors are keeping their eyes on the secure retirement prize. Millionaire Corner research finds that they are seven times more likely to claim adequate retirement savings as a priority over educational expenses. This is consistent with recommendations by professional advisors that securing your own future will better prepare you for helping your children. While there are many options for paying for college, including 529 savings plans, grants, loans and scholarships, three are no such options for retirement. Cash-strapped retirees who make withdrawals or cash out their retirement plans to meet expenses or to pay for college put themselves at risk of being a burden on the very children whose future they are trying to secure, a concern among six-in-ten Affluent investors surveyed by Millionaire Corner.


About the Author

Donald Liebenson


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.