A report issued yesterday by the Alliance for Lifetime Income and Cannex suggests that a little less than half of Americans believe their retirement savings and income will last them throughout their lifetime, which is a 13% drop from a year ago.
"Nearly one-quarter of consumers don’t have any kind of financial plan and another quarter have goals or a direction in mind, but not a well-developed financial plan," said the report.
Cannex is a data provider that offers pricing information on bank and annuity products. The Alliance for Lifetime Income is a consortium of financial services companies that educates investors on income solutions and promotes products such as annuities.
According to the report, called the “Protected Retirement Income and Planning Report,” the two organizations surveyed 2,025 consumers with the help of the Artemis Strategy Group earlier this year, speaking to respondents age 45 to 75. Thirty-five percent of the respondents were either fully retired or working part time in retirement.
Half those surveyed said they were more interested in protecting their retirement income since the onset of the Covid pandemic in 2020. Just 48% said their retirement savings and income would support them for their lifetime, a drop from 55% in 2021, said the report. Also, 74% of those who had an annuity believed their savings and income would get them to the end of their lives, while only 43% of those without one said the same thing.
Sixty-three percent of those surveyed said they worried about their finances several times a month, several times a week or every day.
The report suggests that the lack of concrete planning is a big source of concern.
“Nearly two-thirds of individuals worry about their finances several times a month or more and one quarter worry about their finances every day,” said a report summary. “Nearly one-quarter of individuals don’t have any kind of financial plan, while 28% have an overall direction in mind, but no financial plan to get there. Nearly half of non-retired individuals ages 45-75 are saving less than 10% of their annual income for retirement.”
Seven in 10 respondents said they would be able to fund basic needs in retirement, but only a third would be able to fund their “wants,” according to the survey. And about 31% of those not yet retired thought they had a high or moderate chance of being forced to retire early when they had not planned to for some extraneous reason.
However, among those who worked with a financial professional, 73% thought their savings would last through their lifetimes, whereas only 36% of those who didn’t work with a professional said the same thing.
"Only three out of 10 who are not retired and have a financial professional have talked with their [planner] and have a plan in place if they need to retire early," the report said.
The survey was conducted from April 28 to May 31, 2022.