Last summer, SunAmerica Financial Group embarked on a lofty ambition: to delve deep into the American psyche to better understand Americans’ expectations around the purpose, timing and funding of retirement. The result: The SunAmerica Retirement Re-Set Study. The Study provides our industry with new, important, current insights about today’s investors.
The SunAmerica Retirement Re-Set Study was the second major study we’ve completed looking at attitudes about retirement. The first was exactly a decade ago.
This time around, we found a significant shift in attitudes and actions. We’ve seen a retirement mindset re-set: 54% view retirement as a new chapter in life rather than a winding down—a significant increase over the 38% that held a similar view in 2001.
People have re-set the timing and purpose of retirement: retirement is being postponed by five years—from 64 to 69—triggered in part by increasing longevity as well as the recession and financial need. And retirement no longer means the end of work: almost two-thirds say they would ideally like to remain productive and include work in retirement.
Nearly half of Americans 55 and older expect to provide intergenerational support for family members and, in a new twist on childcare, 70% of those believe their adult children will need financial assistance.
People are living longer and have smaller pensions or none at all. They are woefully under-saved and increasingly concerned about the financial health of the Social Security and Medicare programs provided by the U.S. government. And, of course, the debate that’s been raging in Washington has done nothing to alleviate their concerns. As responsibility for managing retirement savings shifts from corporations and governments to individuals, more than ever, Americans need professional guidance to achieve their protection, savings, investment and retirement income needs.
More adults 55 and older today have used professional financial advisors to assist with retirement planning than 10 years ago (49% versus 40%). And those who have used financial advisors are 72% more likely to feel very financially prepared for retirement. Today, the qualified retirement savings market is a $16 trillion market and is expected to grow to $20 trillion by 2015. And with this new retirement mind-set, people have re-prioritized what’s most important in their investments.
Achieving financial peace of mind has replaced wealth accumulation as today’s primary financial goal. People are now six times more likely to say their top financial goal is “saving enough to have financial peace of mind” (82%) versus “accumulating as much wealth as possible” (13%).
Consumers can no longer rely solely on company pensions and Social Security to provide the financial peace of mind they need in retirement. Real financial peace of mind comes from taking action and putting a plan in place – which they control – that is designed to both protect their family’s future and puts them on a systematic path to saving for retirement.
Nearly all (96%) say it is important to protect themselves, as well as younger and older family members from financial uncertainty. Protecting assets is now five times more important than higher-risk returns. Almost two-thirds (65%) now want investments that are guaranteed not to lose value. And 60% seek to protect their income from market loss and guarantee it for life.
Living a long life, once relegated to a lucky few, is increasingly the norm. The number of people who have celebrated their 100th birthday has more than doubled in just the last ten years. Two-thirds of the survey’s respondents say their goal is to live to 100.