Ignorance is bliss for some of your clients, a new retirement study says.
That’s because many individual investors think their retirement savings plans are on track, but often aren’t.
Some are overly optimistic about achieving retirement saving goals, says a big money manager that believes many retirement plan assumptions are flawed.
Natixis Investment Managers, in a new survey on retirement attitudes called “Retirement Reality Check,” reports that many respondents of all ages are underestimating their retirement costs.
The idea of a secure retirement is “a pipe dream for many hardworking Americans who need saving, beginning with a check of the assumptions behind retirement planning,” according to Ed Farrington, executive vice president of retirement savings strategies at Natixis.
That’s because they are miscalculating when they can stop working and live on their assets for the rest of their lives, the study said.
“A majority of American workers believe they will be comfortable in retirement—even if they have to be careful with their spending,” the study says. “But a deeper look at the attitudes and behaviors that can determine retirement security reveals this may be an overly optimistic outlook for many.”
Participants complained that “mounting debt and living expenses are top reasons Americans say they aren’t saving more for retirement.”
In conducting the survey, Natixis interviewed some 1,000 people of almost all ages who were eligible to contribute to a defined contribution plan.
“People are underestimating how much they need to save, but they may also be underestimating how long they need to save,” said David Goodsell, executive director of the Natixis Center for Investor Insight, in an interview with Financial Advisor.