In this ever-more sophisticated age of investing, financial planners and financial institutions are concerned that workers are still not saving enough for retirement, either due to a failure to realistically assess future costs or because they’re spending too much, as the baby boomers are now.
Many Americans’ poor saving habits are a crisis, concedes Heather Simon, a registered rep with Campisi Financial Network in Fairview Village, Pennsylvania, who believes many people don’t think a shortage of retirement funds will affect them unless someone close to them has an age-related or medical condition that forces the family into a financial quandary. She has clients who spend more on medical prescriptions annually than they earn.
One recent survey found seven in 10 Americans are most concerned with short- and mid-term financial spending, placing retirement savings a distant third. Situations such as this are prompting Prudential Financial to recommend a multi-pronged approach to overcome these “Roadblocks to Retirement,” as its new survey is called.
The study found that about two-thirds of people who unexpectedly retired indicated they weren’t financially prepared, 60% say they are behind schedule in saving, and all survey respondents regardless of age, income or ethnic background “consistently expressed a lack of progress in retirement security” since 2000, according to the survey. About 70% expect to continue working to supplement income during the first 10 years of retirement, and almost half of the respondents said they were perplexed on how to choose financial products to meet their retirement needs, Pru’s study showed.
Mark Hug, chief marketing offer for Pru’s individual life insurance business, calls for more education of the public from employers and advisors on facing retirement. “People need to hear things over and over again,” he says. The workplace is a “key place to break through some of these roadblocks,” especially in the defined contribution plan, Hug explains.