WINDSOR, Conn., Feb. 24, 2012—More than a third of Americans say they trust financial advisors most to better understand retirement issues, according to a new LIMRA survey conducted earlier this month.
“Our survey found that more than 4 in 10 consumers felt they were not well-informed about generating retirement income, investing retirement assets, and managing risks and expenses in retirement,” said Matthew Drinkwater, associate managing director, LIMRA retirement research. “The good news is people are willing to turn most often to financial planners/advisors to seek help when planning for retirement.”
The study found that current retirees were more likely to say they would trust financial planners/advisors for help understanding investing retirement assets than for help generating retirement income or managing risks and expenses in retirement. Younger consumers, however, were more likely than older consumers to trust family, friends and coworkers to help them better understand investing retirement assets. They are also slightly more likely to trust multiple sources of information, including their employers, financial web sites and the company managing their employer-sponsored retirement plan, for some retirement issues.
Fewer consumers said they would seek advice about generating retirement income or managing risks and expenses in retirement. “Many of today’s retirees and future retirees will not be able to depend on a pension or a retirement health plan,” commented Drinkwater. “So it is particularly troubling to see that consumers are not as interested to learn how to generate retirement income or manage risks like, health care, which will be essential for financial security in retirement.”
Prior LIMRA research has found that less than 50 percent of Americans plan for more than 20 years in retirement and few have planned for how they will pay for health care, long term care, rising taxes and inflation or the biggest risk many will face: outliving their assets.
One of the most important ways to militate against outliving one’s assets in retirement is by adequately saving throughout one’s working years. Unfortunately, LIMRA found that less than 35 percent of those surveyed felt they were saving enough to last throughout their retirement years. Even among those with annual household incomes of $75,000 or more, less than half indicated that their saving levels were sufficient. The tough economy is definitely having an impact on Americans’ savings habits. Of those who admitted not saving enough for retirement, two-thirds claimed that the reason they do not save more for retirement is not having enough left to save after expenses.
“As America Saves Week ends, I hope our survey brings more attention to the need for Americans to systematically save throughout their lives and then develop a comprehensive retirement plan that addresses all of the pitfalls that they may face in their later years,” said Drinkwater. “If these things occur, perhaps those years can really be the golden years.”
The findings are based on a nationally-representative survey of 918 Americans who are either the primary financial decision-makers or share responsibility for making financial decisions. The survey was fielded Feb. 3-7, 2012.
LIMRA, a worldwide research, consulting and professional development organization, is the trusted source of industry knowledge, helping more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at www.limra.com.