Despite employer efforts to educate workers, many pre-retirees remain pretty
clueless about their future financial security—or lack of it.
Insurer MetLife found that nearly seven in 10 retirees overestimate how much
they can draw down from their savings each year while still preserving their
principal. In fact, 43 percent of pre-retirees said they believe they can
withdraw 10 percent or more from savings each year while still maintaining their
nest egg. Most retirement experts suggest withdrawing no more than 4 percent
annually.
MetLife surveyed 1,216 workers ages 56 to 65. Surprisingly, six out of 10
respondents underestimated their own life expectancy. About half low-balled the
amount of income they’ll need after they retire.
Those are troubling results.
In many cases, retirees will simply outlive
their savings. Sandra Timmermann, director of the MetLife Mature Market
Institute, which helped compile the survey, said the fact that so many
pre-retirees overestimate how much they can spend down from their retirement
savings annually “should serve as a wake-up call for pre-retirees and advisors
alike.”
One encouraging sign: About 60 percent of those who took the survey said they
were seeking financial advice on such products as 401(k)s, retirement accounts
and long-term-care insurance.
Filed by Matthew Scott of Financial Week, a sister
publication of Workforce Management. To comment,
e-mail editors@workforce.com.
= Member Only
