The Stanford Center on Longevity (SCL), in partnership with Finance of America Reverse, published a new study, titled “Disconnected: Perceptions vs. Reality in Retirement Planning,” that finds the majority of retirees and pre-retirees are not financially prepared for retirement and lack sufficient savings to fully retire at age 65.
SCL found a wide gap between the perceptions that pre-retirees and retirees have regarding many important retirement decisions and the financial realities that they face. The research also explores and identifies various interventions and messaging that can be used by practitioners and researchers to help close this gap by encouraging people to anticipate future challenges and be proactive to address these challenges. Download the full report.
- The majority of pre-retirees and retirees surveyed reported having “modest” retirement savings, with the median value reported at $128,000. Since most financial advisors suggest spending no more than 4% per year of invested savings, that equates to just $5,120 per year that the majority of retirees could safely withdraw from their investments to supplement other retirement income sources;
- Only 10% of respondents report feeling very comfortable about their finances;
- 60% of respondents feel they should have done more planning than they did, while almost 3 in 4 pre-retirees and retirees want to do more planning in the future; and
- 72% of respondents reported relying on their own instincts to make retirement planning decisions.