A significant number of Americans within two decades of retirement who are saving for that major life event are deeply anxious that they are not on track to reach their saving goal, Allianz Life reported Tuesday.
Allianz Life referred to these worried pre-retirees as “chasers.” They made up 49% of a sample of 1,109 Americans in an online survey conducted in April.
Respondents were 45 to 65 years old, had a minimum household income of $100,000 if married or $75,000 if single, owned at least one financial product and had some retirement savings.
The survey identified respondents as chasers when they agreed with at least two of the following statements:
“I feel like I’ve fallen behind where I should be in saving for retirement”: 85% of chasers agreed, compared with just 4% of non-chasers.
“I worry that if I don’t increase my retirement savings soon, it will be too late for me to have a comfortable retirement”: 85% of chasers agreed, versus 2% of non-chasers.
“I wish there were a way that I could accumulate funds faster to make up for lost time saving for retirement”: 98% of chasers agreed, compared with 41% of non-chasers.
At the same time, 63% of chasers said they could not take the chance of investing in high-risk/high-reward financial products.
“While it’s a positive that [chasers] are actively saving for retirement, the level of anxiety is concerning and many are simply not aware of potential solutions to help them catch up,” Paul Kelash, vice president of consumer insights for Allianz Life, said in a statement.
The survey found that chasers had a mean retirement portfolio of more than $400,000, but still struggled to keep up with their retirement savings goals. They may need more education about financial products, Allianz Life said.
Fifty-four percent of chasers said they had too many other current expenses, and one in five said they were saving for other financial goals. As a result, two-thirds expressed fear they would run out of money in retirement, and 61% expected to keep working instead of retiring.
The survey also found that chasers owned fewer financial products than non-chasers:
- 53% had an IRA vs. 70% of confident savers
- 35% owned individual stocks vs. 56%
- 35% owned mutual funds vs. 51%
- 37% had a pension vs. 53%
- 14% owned an annuity vs. 28%
Allianz Life said that although the fastest way to accumulate funds may be to take on more investment risk, only 34% of chasers agreed that the only way to save enough for a comfortable retirement is “to invest in high risk/high reward financial products.”
Instead, 84% of chasers said they were interested in a financial product that offered growth potential with some protection from loss, and 71% were willing to give up some upside growth potential to have some protection from losses.
“Although chasers will likely need to be more aggressive in order to catch up on their retirement savings goals, they still need to maintain some focus on protection because they are closer to retirement,” Kelash said. “A financial professional can help them determine the right mix of financial products.”
But only 39% of chasers said they were currently working with a financial professional, compared with 53% of their more confident counterparts.
“Working with a financial professional can help chasers understand how they could take on more risk, yet still have protection in their portfolio,” Kelash said.
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