Although they might express a strong level of confidence in their savings for retirement, when it comes to crunch time, many affluent retirees and pre-retirees find themselves ill equipped because they do not have an adequate retirement plan in place, according to a recent survey conducted by MFS Investment Management, the Boston-based asset management firm.
The survey, “Retirement Research Study,” was the first of this kind conducted by MFS, with the goal of raising awareness on the importance of formulating retirement plans well in advance of retirement. Results were drawn from 442 surveys completed online by 202 pre-retirees and 222 retirees between the ages of 55 and 75, who are either working full-time or are retired; use a paid professional financial advisor; and report at least $100,000 in investable assets excluding retirement accounts and real estate.
MFS also surveyed 216 advisors serving the high-net-worth investor base. While those advisors would recommend putting together a retirement income plan at least 10 years before retirement, 52% of the survey’s pre-retirees aged 55 or older reported that they do not have an income plan, and over a third of those do not expect to even discuss an income plan with their advisor for another six or more years, if ever. One in three retirees have no retirement plans in place, the survey found.
According to the survey, the escalating cost of healthcare and the rise in inflation are the biggest concern for retirees and pre-retirees. Seventy-nine percent of pre-retirees and 87% of retirees fear that these factors may cause them to outlive their savings. In addition, 57% of pre-retirees feel that they are too conservatively invested to counter the problems associated with healthcare costs and inflation.