Nearly a quarter of all American workers have no retirement plans aside from what Social Security will bring in, which generally only covers 40% of retirement income. Advisors should be aware of this and ensure that they’re asking clients about their retirement plans.
A recent report from Transamerica Center for Retirement Studies found that 67% of working Americans don’t have a written retirement strategy, and 24% reported having no strategy at all for retirement, reports Yahoo Finance. With Social Security not even covering half of retirement income needs, many Americans could find themselves in a very difficult position come retirement age.
Recent findings from Chase Bank and financial experts estimate that most Americans need between 80–90% of their working income in order to retire and maintain a comfortable way of living. This percentage is highly individualized, however, and depends on a variety of factors such as the amount of debt carried into retirement, an individual’s location, and what their retirement income needs are.
For many U.S. workers, there is a growing shift of expectation of working into retirement; the Compendium of Findings About the Retirement Outlook of U.S. Workers found that 49% of workers don’t expect to retire, or else don’t expect to be able to retire until at least the age of 65 or beyond.
Additionally, 42% polled are concerned that they will outlive their retirement investments and savings, and 38% believe that Social Security will be either nonexistent or greatly reduced by the time they reach retirement.
The survey also included information on those that have considered and planned for retirement, finding that 33% of workers had an actual written retirement plan. 39% reported that they were working with a professional financial advisor for managing retirement investments and savings and creating a retirement plan.
The numbers reflect an area of opportunity for advisors to provide retirement planning options in the face of uncertainty for many American workers. Nationwide offers a variety of actively managed ETFs for advisors that cater to a range of investment exposures and strategies for those seeking retirement income options for their clients.
For more news, information, and strategy, visit the Retirement Income Channel.