Retirees hitting savings too early in their retirement, jeopardizing retirement
A survey released in April found that more than half of retired Americans (53 percent) are concerned about running out of money. The study conducted by PNC Financial Services Group also found that 52 percent had been drawing money from their savings. Of those, nearly 60 percent had done so for everyday expenses. While drawing money from savings is expected from older retirees, the study found that nearly 40 percent of those 64 and younger had already begun drawing money from savings.
Joseph Jennings, senior vice president of Wealth Management at PNC postulated that drawing money from savings to pay ordinary expenses suggests that retirees may not have a retirement income strategy in place thereby placing themselves at greater risk of outliving their funds.
In response to their own fears about doing just that, retirees have budgeted tighter, reduced costs and raised income.
The survey, which PNC runs twice a year, also found that retirees continue to rely heavily on Social Security.
A September PNC survey found that more than half of recently retired Americans left the workforce earlier than they had planned, often for things such as health issues or employer actions. The United States ranks 19th out of 150 countries for retirement security. That, despite the fact that our current batch of retirees worked during a period in which pensions played a much larger role in retirement security. For the most part, pensions are dying out and leaving the individual with the responsibility for retirement security. Our low ranking against other countries clearly indicates that Americans need to rethink retirement. It needs to be part of our social consciousness beginning the moment we take our first job. Because most of us are not wired for financial wisdom, it makes sense that good financial planning especially for women (because we live longer) needs to include financial professionals.
If you’re interested in how a financial advisor can prepare you for retirement, contact Julie Price.