According to a report from Cerulli Associates, only about half of all working (non-retired) households have a formal plan for retirement income. Even more alarming is the fact that this number is lower than last year’s – that despite widespread awareness programs on retirement planning and the dangers of procrastination, fewer and fewer households are confident in their plans.
Individuals in higher age brackets are better prepared for retirement than younger investors, with the greatest preparedness seen among 60- to 69-year-old investors, notes the Cerulli Associates report, “Annuities and Insurance 2015: The Evolution to Sustainable Retirement Income Solutions,” prepared with data from Phoenix Marketing International (PMI). Yet of those approaching retirement, only 55 percent have a retirement income strategy in place by the time they leave the workforce.
Wealthier individuals are more prepared for retirement than those with fewer investable assets. Not coincidentally, these individuals are also more likely to work with a financial advisor and have balanced, diversified financial portfolios. This information is particularly vexing because individuals with a precarious plan are the ones who run the greatest risk of running out of money in retirement.