Except only a handful are on their way to achieving that goal
Debt-free is the way to be, but most of us aren’t working that hard to get there.
A new survey from the Teachers Insurance and Annuity of America says 95 percent of pre-retirees want financial freedom in retirement, but only 37 percent of them are financially prepared to do so. The survey focused specifically on pre-retirees, or Americans who are planning to retire within the next five years.
While most respondents say they want more than just enough money for retirement — they want to be debt-free, too — they aren’t ready to fully retire without any source of income. More than half of pre-retirees (55 percent) say they can manage their income when they retire, but 21 percent believe their retirement savings will last them until they die.
Not quite retirement ready
Even though retiring is a handful of years away, many older Americans aren’t as prepared as they should be. In fact, more than one-third of men and one-fifth of women plan to work in some capacity while they are “retired.” Many cite fear of being bored, but others say they fear they won’t have enough money when they stop working full-time.
Even as all income brackets feel very or somewhat prepared for retirement, less than half of them have met with a financial professional, like a financial adviser, to find out exactly how much money they will need after they stop working full-time. Because of that, some pre-retirees may think they have more money to last than they actually have. Twenty-one percent of respondents believe they have enough money to last them a lifetime while 19 percent say they have enough to last upwards of 20 years. More concerning is the 7 percent of respondents who said they didn’t know how long their retirement savings would last them.
Learn from the mistakes of those before you
As more than half of pre-retirees wish they had stashed more money away early on and almost half wish they had saved more, the lack of money is hurting not only their financial well-being, but their physical one.
Health care is a top concern of Americans who are on the verge of retirement: 52 percent say declining health keeps them up at night while 43 percent worry that all their retirement savings will go toward mounting health care costs. It’s no surprise since health care in retirement is costly. In fact, women will pay more for health care when they are older than their male counterparts.
If you’re looking to avoid the mistakes of those that came before you, simply follow their advice: start saving right now. Make a budget that works for you and be sure to add a savings and retirement line item to it. If you pay yourself like you pay your bills, it’ll make saving for retirement much easier. Think of it like a necessity rather than a luxury. Max out your 401(k) contributions and take advantage of employer matches. If you want, you can open up a health savings account for an extra level of financial protection.
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Article last modified on June 23, 2017. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Financial Flexibility Is Top Goal Among Pre-Retirees - AMP.