A new study from Northwestern Mutual found that nearly seven out of every ten surveyed Americans are concerned that they may outlive their retirement savings, and a third believe that there is a greater than 50 percent chance this will occur. Doubts about the long-term sustainability of Social Security appear to be a big factor behind respondents’ gloomy retirement outlooks because only 24 percent feel that it is “extremely likely” these benefits will be available in old age, and the same proportion believe that it is “not at all likely” Social Security will still be around when they retire. What is worse is that among the surveyed non-retirees with doubts about the future of Social Security, a quarter still anticipate that it will be their primary source of income in retirement, and an alarming 11 percent expect it to be their only source of income in old age.
Many respondents also appear to worry about the effects that healthcare costs, stock market volatility, political uncertainty, and having to care for other family members may have on their overall financial well-being in retirement. Despite such a wide array of concerns, 44 percent of surveyed Americans say that they have not taken any steps to prevent a potential old-age savings shortfall. As for the respondents who are making at least some effort to decrease the likelihood that they will outlive their savings, the most popular actions are to increase the rate at which they set money aside for retirement, invest such funds in the stock market and other assets that have the potential to increase in value, put together a detailed retirement plan, and seek guidance from a professional financial advisor. Respondents also believe that earning a higher income and eliminating all of their outstanding debt will enable them to better prepare for retirement and avoid a financial hardship in old age. Encouragingly, 46 percent of surveyed Americans are optimistic that such improvements to their financial situation will happen this year.
Sources: Northwestern MutualPost author: Charles Couch