Pre-retirees show that they understand the retirement challenges they’re facing and have adjusted their expectations—somewhat. 51% of pre-retirees expect to generate income in retirement by working full-time or part-time, compared with 6% of current retirees. Pre-retirees are more likely to base their decision about when to retire on wealth rather than age with 50% of Gen Xers and 62% of Millennials saying they will be ready to retire when they have saved enough money, compared to current retirees, which 37% said their decision to retire was based on when they became eligible for social security.
Actions taken by many pre-retirees fall short of what is needed to fund a secure retirement. 79% of pre-retirees agree they should be doing more to prepare for retirement, but only 48% say they have a strong retirement plan in place and even fewer use a financial advisor. 16% of Boomers, 19% Gen Xers and 31% Millennials are not saving for retirement at all.
Pre-retirees generally feel less prepared for retirement. Additionally, they have difficulties estimating how much monthly income they will need in retirement and how much they need to save for a secure retirement. When asked their level of retirement preparedness, pre-retirees give themselves an average grade of “C,” (vs. the B-/C+ retirees give themselves). Gen Xers expect to have to save the most to fund their future retirement ($2.5million) compared to boomers ($869,000) and millennials ($1.1million).
51% of current retirees say they are living their “dream retirement.” Compared with those who aren’t living their dream retirement, these individuals started saving six years earlier than their peers who are less satisfied in retirement (at 40 years old vs. 46 years old), are more knowledgeable about investments, show more willingness to take investment risks and are more likely to use a financial advisor.
Read the 2018 Retirement Preparedness Study to learn more about how well individuals are preparing for retirement, and how they are responding to the challenges they face.
The “2018 Retirement Preparedness Survey” was commissioned by PGIM Investments and conducted by The Harris Poll. A total of 1,514 interviews were conducted online from January 18 through February 1, 2018, among respondents who met the following criteria: U.S. residents; age 21+; employed full-time, part-time, self-employed, stay at home spouse or retired; and primary or shared financial decision maker for household.
This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice as defined by the Department of Labor’s Fiduciary rule or otherwise. This information is not a recommendation about managing or investing your retirement savings. Clients seeking information regarding their particular investment needs should contact a financial professional.
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