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More Americans Upbeat About Retirement, But Most Still Aren’t

A new study from Transamerica paints a mostly bleak picture for American workers, with a majority saying they still haven’t fully recovered from the Great Recession. At the same time, that unease is creating new opportunities for advisors, as more Americans express interest in professional retirement advice.

According to the 16th Annual Transamerica Retirement Survey, which surveyed 4,550 workers over the age of 18 this past winter, of those who said they were negatively impacted by the Great Recession, just 20% have fully recovered financially.

In addition, 80% of respondents of all ages (including 85% of Baby Boomers) believe their generation will have a harder time achieving financial security than their parents did. The study also found that more than a quarter of Americans expect to rely solely on Social Security for their retirement income, and another 13% expect to never stop working, which is in line with similar studies conducted this year.

Pessimism Down, But Still Prevalent

One bright spot is that the number of Americans expressing pessimism is still down compared to the early part of the decade. In 2015, 59% of respondents expressed confidence in retiring comfortably, an eight-point jump from 2011. In addition, 66% of those surveyed said they feel like they could possibly work until 65 and not have enough to retire; this is a huge number, but also a four-point drop from 2011.

However, the dynamic of an improving economy that still hasn’t assuaged many workers’ fears about retirement has created a larger market for advisors. Saving for retirement was the top financial priority among respondents this year, with 27% responding as such. In 2011, as the country was still experiencing near-zero economic growth, retirement saving was the third most-popular priority, behind paying off debt and merely covering basic living expenses.

Advisors Needed

The survey also reports that just 58% of Americans are saving for retirement outside of work, meaning there is a large subsect of workers whose only vehicle for retirement is a 401(k). In addition, many workers say they still need professional financial education, with just 26% of survey respondents saying they have a good understanding of asset allocation principles. More than half (53%) of those asked said they determined how much money they will need for retirement simply by guessing.

Interestingly, while 79% of workers say they’re getting some kind of information on retirement planning, just 28% are getting it from a financial planner or broker. A quarter of respondents get information from financial websites, and 22% use the website of their retirement plan provider. Even though respondents could select multiple answers, no single source of information is used by more than 30% (that category being friends and family).

When asked who their “most influential” source of retirement information was, 20% said their financial planner, the most popular answer. While that number has held steady since 2011, the number of people who believe financial websites or their plan provider’s homepage is their most influential resource has dropped to 9% for each, down from 2011.

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