Retirees Frightened About Going Broke
More than half of current retirees have no plan for withdrawing retirement savings.
Fifty-two percent of retirees are withdrawing money from their retirement savings with no strategy. Fifty-three percent are concerned about running out of funds in the near future, even though they’ve implemented efforts to budget and reduce costs.
This news comes from PNC’s semi-annual Perspectives of Retirement survey of over 1,200 adults aged 35 to 75. Another interesting aspect of the survey found that retirees continue to rely heavily on Social Security. Almost eight in 10 receive Social Security, while 66 percent have a pension and 50 percent use money from savings and investments.
Joseph Jennings, senior vice president of Wealth Management with PNC, says…
“Most retirees don’t have a plan for drawing down savings and that is a concern. Using savings to cover expenses indicates that retirees may not have a retirement income strategy in place and are putting themselves at greater risk of outliving their funds.”
The fifty-three percent who fear their funds will expire too soon report:
- Two-thirds have changed the way they manage their money. Fifty-nine percent have reduced expenses and 41 percent budget more carefully.
- Those who are concerned are more likely to say they get a higher percentage of retirement income from savings or investments (an average of 35 percent vs. 24 percent).
- The equity in their home is more likely to be important to their retirement plans, however, they are more reluctant to rely on the equity.
- They have significantly fewer assets: On average, total investable assets are $225,000, compared with average assets of $411,000 among those who are not concerned.
Gary Herman, President of Consolidated Credit, believes planning ahead for retirement is the key to a comfortable future…
“The sooner you start planning for retirement the better off you’ll be when the time comes to stop working. Take advantage of your companies 401 (k) plan, open an IRA – don’t just rely on Social Security because chances are it won’t be enough to cover all your expenses.”
If you need help planning out your retirement, setting up a budget or just want to learn better money management skills, don’t hesitate to contact one of Consolidated Credit’s certified credit counselors today.