A recent study by Charles Schwab found that between under-saving, and unforeseen costs during retirement, retirees may be woefully under-prepared. In the quarterly Real Life Retirement survey, 44 percent of retirees admitted to supporting at least one individual financially. Most of those retirees said they were supporting children (53 percent), but grandchildren (37 percent) and parents (12 percent) were also named as dependents.
A press release from Charles Schwab announcing the results of the survey also highlighted tips for retirees that could translate into opportunities for advisors. Schwab encourages retirees to put their retirement first, but recognizes that they can’t just ignore their parents; the company recommends retirees think of other ways to help besides writing a check:
- Check up on their retirement entitlements such as Social Security and Medicare.
- * Do they have assets such as a house they could borrow against?
- * Help them establish a realistic budget.
- * Make sure they have an appropriate plan in place for generating income from any existing investments.
This is where a trusted advisor can become a trusted family advisor.
Simply under-saving is another way retirees are cutting off their preparation. The average amount of money respondents have saved for retirement, according to the survey, is $219,000, nearly $1.8 million less than what most people commonly believe they will need to retire comfortably. The gap is especially apparent among women. Six million fewer women than men say they are “planning to be more mindful of their spending during retirement” than they might otherwise be due to the economy. On average, women have saved only $180,000, far less than the $247,000 saved by men.