Retirement Unknowns Causing Anxiety

According to the findings of the 2013 Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey, retirement stress is on the rise, with more than one-third (37%) of respondents indicating they are more concerned today than 12 months ago about outliving their assets or having to make major sacrifices to their retirement plans. In response to this stress, two-thirds (67%) of preretirees indicated they are willing to make financial sacrifices now in order to live better in retirement. 

However, three in 10 American adults have not started saving for retirement. And it is not just young adults that lack adequate savings; 68% of those ages 45 to 54 and half of those ages 55 to 64 have $100,000 or less in retirement savings. 

Respondents have an understanding of their expected expenses in retirement, indicating that the expenses they are most concerned about paying are health care (48%), followed by living (24% housing, 3% food) and lifestyle (12%). Ninety-three percent of preretirees expect their retirement expenses to be similar or less than preretirement spending, and only 15% of those retired indicated their actual retirement spending was more than expected. 

Working with an adviser appears to help; 58% of those who have worked with an adviser to develop a written retirement income strategy are confident about how much of their income will be replaced by Social Security, and 55% are confident about how much of their income will be replaced by their employer-sponsored retirement plan. 

The survey revealed two retirement misconceptions that might have serious implications on retirees' retirement income. When asked what adjustment they would make if they were unable to retire as planned due to insufficient income, the top two responses were to delay retirement (62%) and to increase sources of income in ways such as working part-time (45%). However, one-third of today's retirees surveyed were forced into retirement due to circumstances beyond their control, such as health issues and company downsizing, indicating that working longer may not be a realistic option for many people. 

Secondly, the majority (74%) of preretirees anticipates taking Social Security benefits at their "full" retirement age (between ages 66 to 67) or later. However, the majority (63%) of today's retirees were forced to tap Social Security benefits early, sacrificing their benefit amount by as much as 25%. 

The 2013 Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey was conducted online during January among a sample of 1,001 men and 1,001 women, who were 18 years of age or older.