New research reveals that nearly half of retirees retire sooner than planned, a percentage at odds with expectations of most pre-retirees.
Genworth Financial reports the findings in a new study, “The Future of Retirement Income.” Based on online surveys of 1,340 retired consumers and pre-retirees, and 300 financial professionals, the report explores the state of retirement income planning.
The survey shows that 73 percent of pre-retirees think they will retire when planned. While 48 percent of actual retirees did in fact retire when they expected to, 46 percent retired sooner than planned, primarily due to the loss of job. Just 6 percent of actual retirees retired later than expected.
The report adds that 76 percent of pre-retirees say they may delay retirement because of fear they would not have enough money. Just more than one-third (36 percent) fear that expenses will be too high for them to retire.
The survey notes also that 40 percent of people who don’t own an annuity, but would consider buying one, have never been presented the opportunity to do so by financial professional.
“Part of the reason: professionals expect their clients to object to annuities,” the report states. “But this expectation could be wrong.”
The report adds that 58 percent of consumers believe they already have enough predictable income to satisfy their retirement needs, and thus don’t need an annuity. Additionally, 53 percent of consumers who were considering annuities had second thoughts because they would rather invest directly in the market.
An additional 52 percent object to annuities because they are not comfortable with a product that doesn’t permit access to funds without penalty for a period of time. However, 78 percent of people who own annuities are satisfied with their access to their money.
“In other words, the more consumers learn about annuities, the more they like them,” the report states. “Furthermore, consumers who own annuities have better opinions of them than those who do not.”
The report adds 91 percent of annuity owners have positive or neutral impressions of them, compared to 68 percent of non-owners.