Most pre-retirees are clueless about how much income they will need in retirement.

Most pre-retirees are full of regrets when it comes to their financial planning, a survey released Thursday by TIAA-CREF shows. In addition, only about a third work with a financial advisor or save via an IRA.  

The firm says the situation can be improved by pre-retirees jumping into the financial planning process as soon as possible.

“Employers and financial advisors can work with individuals to develop a robust retirement plan at any life stage, so they can pursue the kind of retirement they envision,” said Teresa Hassara, executive vice president of TIAA-CREF’s Institutional Business, in a statement.

Looking Back

More than half (52%) of those nearing retirement (age 55-64) say they wish they had started saving for the future sooner, and many say wish they had made smarter financial decisions earlier in their career — including saving more of their paycheck (47%) and investing their savings more aggressively (34%), steps that can be made easier when taken with the support of a financial advisor.

Yet, just 35% of those surveyed are saving in an IRA or working with an advisor. Plus, few — 32% — have calculated the yearly income they need for retirement, and only 12% have money in a health savings account.

“By not making the most of these options, many Americans now feel uncertain about their financial futures, with 68% of those approaching retirement saying they are not prepared for what’s to come,” the report said.

Facing Forward

According to the survey, financial challenges make up three of the top four concerns for individuals close to retirement.

For instance, 45% worry about not having enough money to cover their monthly expenses. Others are anxious about how health care costs (35%) or inflation (32%) may deplete their retirement savings.

Despite these concerns, the poll finds that only 10% of pre-retirees own an annuity.

To get by financially in retirement, a large number (42%) plan on working part time. Many (39%) plan to be more conservative about how much they spend on entertainment and other luxuries, and 23% plan to “downgrade their living quarters” to save money.

These realities may conflict with their desire for flexibility to do “what they want, when they want” during retirement, which 57% of this group says they look forward to the most in these coming years.

Again, financial planning could likely improve the options available to retirees, Hassara says.

“If Americans find that their retirement savings aren’t adequate to meet their expectations about retirement life, it’s never too late to make adjustments. In fact, if a 55-year-old starts to max out his or her employer-sponsored retirement plan contribution next year and continues to do so for the next 10 years, those savings could grow to about $325,000,”  Hassara said.

“This research reinforces that preparing for retirement shouldn’t become a sprint to the finish, but rather a long-distance pursuit that requires careful planning throughout an adult’s life,” she explained. “This will help prevent those nearing retirement from feeling like they have to play catch-up near the end of their careers. Developing and acting on a carefully constructed plan can help individuals at any age build a financially secure future.”