Although half of Americans consider retirement a top priority, 58% do not have a formal retirement income and savings plan, according to a report released by Deloitte.
Harris Interactive surveyed nearly 4,500 Americans over 26 on behalf of Deloitte Center for Financial Services and found that although just 30% say they feel “very secure” in their retirement prospects, those with a plan were four times more likely to feel secure. What’s troubling, though, is that many people are convinced that no matter how much they save, it won’t be enough.
“People used to think about retirement as a straight-line plan to a lump sum,” Ed Tracy, one of the authors of the report, told AdvisorOne on Friday. “That’s changed, particularly since the financial crisis; the way people think about retirement is fundamentally changing.”
Investors are facing more short-term challenges, Tracy said. “Life is more turbulent in terms of employment, education—the cost of college isn’t going down—health care, basic short-term expenses. It got to the point where a lot of people are pessimistic.”
To combat that pessimism, “wealth managers have to recognize that viewpoint has changed a bit and pursue short-term, medium-term and long-term strategies.
The influence of an advisor is undeniable. Two-thirds of respondents who work with a professional advisor had a retirement plan compared with 28% of respondents who don’t have an advisor.
Deloitte identified five potential barriers that may be keeping respondents from adequately preparing for retirement.