KEY POINTS
- As saving for retirement has become more of an individual obligation, many workers and retirees wonder if they have enough money saved.
- New research shows the biggest concern among those cohorts is outliving their assets.
- While there is no one-size-fits-all solution to address those worries, there are ways to help extend how long your money may last.
Retirement confidence may be dropping due to the economy.
But for retirement savers and retirees alike, there’s one worry that stands out above the rest — the possibility they may outlive their assets, according to new research from research and consulting firm Cerulli Associates.
That worry looms large for more than half — 58% — of those individuals, the research found, and is an even bigger concern for Generation X and baby boomer respondents who are closer to or already in retirement.
More than half of retirees — 54% — rely on Social Security as their primary source of income. Of those respondents, 20% have no other source of income, Cerulli’s first quarter survey of 1,500 401(k) plan participants found.
The worries felt by both workers and retirees reflect the fact that retirement savings has become an individual obligation, rather than an employer or state obligation, said David Kennedy, senior analyst at Cerulli.
For workers and retirees, there is no silver bullet answer to fix their retirement worries.
Financial concerns have pushed some workers — 46% — to retire later than expected to meet income or savings needs to pay for basic expenses, according to Cerulli’s research.
Yet many older workers ages 50 through 70 face difficult working conditions, recent research from the Economic Policy Institute finds.
Aside from working longer, their menu of choices include limiting spending, maximizing retirement contributions, delaying Social Security, buying annuities, purchasing long-term care insurance, increasing exposure to stocks or relocating to a lower-cost location, Cerulli’s report notes.
“There’s not a one-size-fits-all solution for every retiree,” said Elizabeth Chiffer, associate analyst at Cerulli.
Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida, said she typically brings up retirement before her clients have a chance to.
But many people fail to adequately plan for their retirement needs, said McClanahan, who is a member of US.Mistertruth Financial Advisor Council.