Avoidance risk: Half of workers prefer not to think about retirement investment until they get closer to their retirement date. Image: 99Art/Shutterstock.com
By: FEDweek StaffMany people have “concerning” attitudes about preparations for retirement, including that nearly half of current workers “would prefer not to think about or concern themselves with retirement investment until they get closer to their retirement date,” according to a study by the TransAmerica Center for Retirement research.
That’s even though 71 percent of more than 10,000 people polled in a survey done with the Harris Poll said they have concerns that Social Security “will not be there for them when they are ready to retire,” it said.
“This potential avoidance of planning could put their retirement security at risk,” it said, noting that 65 percent agreed that “they do not know as much as they should about retirement investing.” Only 32 percent use a financial advisor, though, and while 66 percent have some form of financial strategy for retirement, only 25 percent have a written plan.
Further, “A concerning percentage of people are dipping into their retirement savings before they retire. Loans and withdrawals from retirement accounts can severely inhibit the growth of their long-term savings. Among those who are not yet retired, almost one in three people (32 percent) have taken a loan, early withdrawal, and/or hardship withdrawal from their 401(k) or similar plan or IRA, including 25 percent who have taken a loan and 15 percent who have taken an early and/or hardship withdrawal,” it said.
Apart from Social Security’s future, the largest concerns about retirement also were financial in nature: the potential for declining health that requires long-term care, outliving savings and investments and not being able to meet basic financial needs. Those were well above lifestyle factors such as potential cognitive decline, feelings of isolation and lack of meaningful activities.
Possibly as a reflection of those concerns, 42 percent said they expected that future generations of retirees will be worse off than current retirees, with 29 percent believing it will be about the same, 15 percent saying they will be better off and the rest saying they couldn’t judge.
However, respondents were nonetheless more confident of their own retirement futures, with 66 percent saying they confident of having a comfortable retirement lifestyle, including 21 percent who are very confident, it said. Thirteen percent were “not at all confident” and the rest were “not too confident.”
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