What Are the Top Concerns of Americans in Retirement?

New survey results reveal a variety of differences by generation and other demographic factors pertaining to perceptions and concerns about retirement savings strategies.

Now in its 7th year, Franklin Templeton Investments’ annual Retirement Income Strategies and Expectations (RISE) survey finds that the majority of individuals, not surprisingly, are concerned about how they will manage income in retirement, even for those within just a few years from retirement.

According to the results, 52% of workers are concerned about managing retirement income to meet expenses and more than one third of those within five years of retirement do not have a strategy to recreate a paycheck. One in three workers within five years of retirement also want help from their employer in choosing an investment to generate income.

Similarly, one-third (33%) of workers state that not saving enough would be the most likely reason their retirement could be delayed, compared to only 3% of current retirees who say their retirement was delayed for this reason.

And for nearly half of respondents (49%), Social Security will be their top source of retirement income, followed by a workplace retirement plan (41%) and a checking and savings account (27%).

Americans overall are most concerned about paying for medical and pharmaceutical expenses in retirement (31%), followed by paying off debt (18%) and funding assisted living care (15%), according to the results.

Generational Differences

Drilling deeper into the retirement income concerns and strategies across generations reveals that different viewpoints and specific needs begin to emerge.

“The differences between generations, even among those of the same gender, show that comprehensive retirement planning requires a holistic view that incorporates demographic differences and short-term risk tolerances as well as long-term goals,” explains Michael Doshier, vice president of Retirement Marketing at Franklin Templeton Investments.

For example, Gen X women apparently are the most concerned about retirement income. Younger Gen X women (ages 38-45), in particular, expressed the most concern about managing their retirement income to meet their expenses in retirement (62%), compared to 45% of older Gen X women (ages 46-53).

Yet, despite these concerns, slightly more than two-thirds (67%) of Gen X women do not have a retirement income strategy that could last 30 years or more, compared to 55% of Millennial women and 51% of Baby Boomer women who also say they lack such a strategy.

Millennial men, on the other hand, are more concerned about short-term volatility, compared to their older counterparts. The results show that 61% of this cohort express more concern about shorter-term market volatility than they do about not achieving their long-term goals. In comparison, only 40% of Gen X men and 50% of Baby Boomer men express more concern about shorter-term volatility versus achieving their longer-term savings goals.

Millennial men who currently work or have previously worked with a financial adviser are also more likely to have developed a written retirement income plan with their adviser (67%), compared to their Gen X (43%) and Baby Boomer (56%) counterparts. But despite this finding, Millennial men, regardless of whether they have an adviser, expressed the most concern (60%) about managing their retirement income to meet their expenses, followed by 45% of Gen X and 40% of Baby Boomer males who say the same, the report notes.

Overall, the majority of Americans (62%) consider a financial adviser important to retirement planning, yet only 29% of survey respondents currently work with one.

Meanwhile, across generations, Americans are most concerned about medical expenses — but does that mean they’re doing anything about it? According to the results, nearly half of respondents (46%) stated that they don’t know how they’re going to pay for these expenses in retirement. What’s more, 76% of those who are not yet retired said they are not using or do not have access to an HSA to save for their medical expenses.

The 2018 RISE survey was conducted online among a sample of 2,002 adults comprising 1,002 men and 1,000 women 18 years of age or older, administered Jan. 17-25, 2018, by ORC International’s Online CARAVAN.

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