Confidence In Retirement Finances Declines, Survey Says

Older Americans’ confidence in their financial preparations for retirement continued to decline this year––a decline that is driven by fear, according to speakers at a press briefing today hosted by the Insured Retirement Institute that kicked off National Retirement Planning Week.

Confidence in financial preparations for retirement dropped to 37 percent this year from 44 percent in 2011, the first year IRI did a Retirement Confidence survey. The press conference highlighted the study, which also showed 61 percent of Baby Boomers do not see their financial situation improving in the next five years.

The survey included 802 Americans between 50 and 66 years of age.

The lack of investor confidence is driven by fear of risk, fear of volatility of both interest rates and the market, and fear of loss, says Bruce Ferris, head of sales and distribution for Prudential Annuities and a member of the IRI board of directors.

That fear created by the 2008 financial crisis causes some bad financial behavior by investors who are afraid to stick to their retirement plans, says Ferris. This bad behavior is exemplified by the $550 billion that was pulled out of equities since then and the $2.6 trillion that is sitting in cash instead of being invested, Ferris says.

The good news is that those investors working with financial advisors are much more confident in their retirement plans than those doing it on their own. For those working with an advisor, 48 percent are very or extremely confident in their financial planning, compared to only 28 percent of those not working with an advisor.

Likewise, 71 percent of baby boomers working with an advisor have set savings goals and 94 percent have retirement savings, compared to 34 percent and 64 percent respectively for those not working with an advisor.

The number of boomers who anticipate work to be a source of income during retirement rose 12 percent during the past two years to 79 percent. The percent that expect to retire at age 70 or later rose from 11 percent to 18 percent since 2011.

Source:  Karen Demasters, Financial Advisor Magazine

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida.