2018 Retirement Preparedness Study

Many retirees are enjoying a secure retirement, but many pre-retirees envision that the "dream retirement" is becoming more elusive. This study explores how well individuals are preparing for retirement, and how they are responding to the challenges they face.

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A Generational Challenge

The 2018 Retirement Preparedness Study explores the challenges facing Americans as they move toward retirement. Generational differences in approaches to retirement planning reflect each generation’s perspectives, experiences, and length of time to retirement. What are Millennials, Gen X-ers and Baby Boomer pre-retirees currently doing to prepare for retirement? Are their current actions aligned with their retirement goals and expectations? The study explores the answers to these questions and more.

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Key Takeaways

Retirement expectations are evolving

Pre-retirees understand the retirement challenges they’re facing and have adjusted their expectations—somewhat. They are more likely to base their decision about when to retire on wealth rather than age with half of Gen Xers and 62% of Millennials saying they will be ready to retire when they have saved enough money. Also, 51% of pre-retirees expect to generate income in retirement by working full-time or part-time, compared with 6% of current retirees.

Prominent gaps between expectations and actions

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, 63% do not use a financial advisor, and 19% Gen Xers and 31% Millennials are not saving for retirement at all.

Pre-retirees need to do more, but don’t know how

Pre-retirees 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, they give themselves an average grade of “C.” Astonishingly, 25% of pre-retirees are not sure how much they are currently saving for retirement.

Retirees living the “dream retirement” offer clues to success

Half of current retirees (51%) 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, are more knowledgeable about investments, show more willingness to take risks and are more likely to use a financial advisor.

Download the full 2018 Retirement Preparedness Report

About the Survey

The 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.

 

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