Investors’ confidence in their ability to fund their retirement is up dramatically this past year, but it may be a misplaced confidence, says financial advisor Tony D’Amico.

The continuation of the bull market, despite recent volatility, and the growth in 401(k) and other retirement funds has people feeling good about their prospects for retirement.

But how much a person should have in the bank for retirement depends on more than good investment returns, said D’Amico, the CEO of Fidato Wealth in Strongsville, Ohio.

D’Amico is one of more than 1,000 advisors who participated in Financial Advisor’s Retirement Planning Survey 2018, which showed people are feeling good about their retirement. The participants covered the gamut of advisors from sole practitioners to members of large firms and advisors with no investment minimums to those with million-dollar minimums.

In the 2018 survey, more than 46% of the advisors said their clients who are still working have become more optimistic this year about having enough money for their lifetime. This is a dramatic uptick from three years earlier, when only 10.6% of advisors said their clients were more optimistic than they were the year before.

The numbers for those who were less optimistic were reversed. This year, only slightly more than 12% found their clients to be less optimistic whereas 35% of advisors had found clients less optimistic in the 2015 survey.

Currently, 41% of advisors say their clients have not within the last year moved at all in their optimism or pessimism about their ability to save enough money for the rest of their lives. Fifty-four percent were static in their feelings three years ago.

D’Amico, whose client minimum in investable assets is $500,000, says 70% of his clients have enough money saved to retire early if they wanted to. “Clients are more engaged in being ready for retirement now. They are asking more detailed questions and becoming more educated,” he adds. “Five years ago, they wanted to know when the recovery would be complete. Now they want to know how long this can continue.”

Don Mahlke, senior wealth management advisor for GCG in Deerfield, Ill., says client confidence is attributable to the market highs and the stability in the job market. “A good share of our clients are on track to meet their retirement goals, but not all by any means,” Mahlke says. “We make sure they are saving enough and taking the right amount of risk.”

One of the things affecting the clients’ level of optimism is the potentially high cost of health care in retirement. Most advisors, 63%, provide at least limited advice on health-care financing, while nearly 20% provide extensive planning. Only slightly more than 17% do not include any health-care advice in their planning process.

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