The expected retirement age among affluent pre-retirees today has gone up to 68¡ªeight years higher than the actual retirement age reported by those already in retirement. There are multiple factors driving this delay including the anticipated sources of retirement income, and an overall lack of confidence among pre-retirees (non-retirees 55 years or older) in their ability to meet all of their retirement income needs. These and other important findings are included in Investor Retirement Income Trends™, a recently published Cogent Reports™ study by Market Strategies International.
According to the report, only 28% of pre-retirees are highly confident in their ability to generate a suitable income in retirement to cover all of their needs. By contrast, nearly half (48%) of retirees are confident in their ability to do so.
¡°We see over one-third of all affluent Americans expressing serious concerns about either outliving their money or not being able to handle unexpected costs,¡± said Julia Johnston-Ketterer, senior director and author of the report. ¡°These legitimate fears, coupled with increasing longevity, are pushing even affluent Americans to remain in the workforce longer.¡±
Other important factors at play¡ªand the major differences between retirees and pre-retirees¡ªare the anticipated sources of retirement income. For example, pre-retirees are three times more likely to rank a 401(k) as their number one source of anticipated retirement income (25% vs. 7%). Conversely, retirees are almost twice as likely to cite a pension as their number one retirement income source (39% vs. 22%).
¡°The more Americans become dependent on funding their retirement income through 401(k) savings, the more likely they are to remain in the workforce until they feel confident they have adequately funded those accounts,¡± said Johnston-Ketterer. ¡°But it¡¯s a moving target, and without the guaranteed lifetime income that a pension provides, investors are increasingly concerned about coming up short.¡±
