Despite the tumult in the global economy over recent years, procrastination still seems to govern whether investors are motivated to focus on retirement planning.
According to a survey by the Society of Actuaries of 1,600 retired or close-to-retirement investors 45-80, just 35% said they have a detailed retirement road map designed to manage the risk of running out of money. That incidence is virtually unchanged since 2005. Meanwhile, 57% of retirees said they have a risk management strategy in place, up from 44% in 2005.
The “The 2011 Risk and Process of Retirement Survey” found that too few Americans take into consideration changes in life expectancy, rising health care costs, inflation and other factors that affect retirement security despite the fact that 54% of retirees and 63% of pre-retirees worry that they will deplete their savings in the earlier years of retirement.
Some 69% of retirees and 74% of pre-retirees said that they are concerned that inflation will devalue their savings. Additionally, 61% of retirees and 74% of pre-retirees said they are unsure whether they will be able to afford adequate health care.
Those who don't think the changing metrics of retirement costs will affect them said so because they plan to delay retirement. That doesn't account, however, for such unforeseeable circumstances as health concerns or joblessness. The survey revealed that half the retirees had to retire from their primary occupation before they turned 60. Even though studies have shown an increase in employed people over 65, those who lose their jobs in their 50s or 60s have a harder time finding work.
Americans, especially younger ones, do not realize how easily poor planning can lead to poverty during retirement years, said Carol Bogosian, a member of the Society of Actuaries. With poor planning, “they can slip into poverty ... late in their retirement years,” she said.