Americans are facing a challenging retirement without bolstering the income they receive once they stop work.
A new survey from RBC Wealth Management shows that pensions and Social Security may not be enough to provide a comfortable lifestyle in later years, requiring an additional "retirement paycheck" to top up income.
The poll of those nearing retirement or already retired in 2023 found that 43% of respondents are concerned that they will outlive their assets, an increase of six percentage points from a similar study in 2018, and 32% are worried about investment loss, up from just 9% in 2018.
There is also a significant knowledge gap among respondents, with little more than half (53%) saying they understand how their investments and assets will work together to produce retirement income, while 49% said they understand how withdrawals will impact them, and 44% understand minimum distributions.
Also concerning is that almost half of those who took part in the research said they do not have a documented retirement plan. More of those that do (91%) are confident in maintaining their standard of living in retirement than those without (70%).
The report highlighted the potential for advisors in engaging clients in thinking beyond simply retirement savings by gaining an understanding of how assets and investment work using the ‘retirement paycheck’ analogy.
"Today's retirees need to navigate risks and establish a well-thought-out retirement paycheck that will likely come from a number of sources," said Angie O'Leary, head of wealth planning for RBC Wealth Management – U.S. "Everyone 60 and older should have a personalized income plan, so they have the financial confidence to pursue the lifestyle they want in retirement."
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