Survey results released Thursday by ING U.S. found that pre-retirees may be in for a rude awakening when they stop working. Although just 8% said they expect to have a lower standard of living in retirement than they do currently, 33% of retired respondents said they’ve had to cut back now that they aren’t working.
In a separate survey conducted online by ING in June, 80% of respondents said they would rather tighten their purse strings now to guarantee income in retirement. Almost 40% still expected to run out of money in retirement. That might not be very surprising, though, considering over a third of respondents think they can retire comfortably with $500,000.
ING surveyed 850 adults over age 30 for the phone poll in early June. The online poll gathered responses from about 2,400 consumers in mid-June and early July. Results from both surveys were released simultaneously.
ING found that advisors were a significant factor in respondents’ confidence. Almost 90% of respondents who work with an advisor said they’ve calculate what their current savings mean for their monthly income in retirement, compared to 59% of those without an advisor. While 37% of respondents thought it likely that they’d run out of money in retirement, among those without an advisor, 41% had the same fear.
“Don’t get me wrong; change is good and we all hope to get to that point at some time, but without some help, a retiree can easily get thrown off course,” Rich Linton, president of individual markets for ING U.S., said in a presentation discussing the surveys’ results.
One of the greatest obstacles to retirement planning is inertia, Linton said. “Retirement planning is complicated, it’s not an immediate need for me today, or frankly, it’s not interesting to an individual so they put it off,” he said.