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| Americans Not Confident About Retirement "Paycheck" |
Over the past two decades, research1 has shown that Americans have increasingly focused on personal savings as a key component of retirement planning, primarily through their employer-sponsored retirement plans.
A recent study2 indicates that workers closest to retirement, however, have not focused on how to translate their savings into a stream of regular income (a retirement "paycheck") during their post-employment years.
In fact, most workers over 55 simply do not understand the critical tradeoff between a retiree's compelling need for regular, guaranteed income and the pre-retiree's natural inclination to hang on to as much of his/her "nest egg" as possible.
When Americans in their late 50s or early 60s were asked to calculate how much retirement income they could generate, very few felt able to provide an accurate estimate.
The majority are either guessing how much income they would have, or, even worse, simply do not have any idea of how much income they will be able to generate for themselves during retirement.
Unfortunately, near-retirees cannot afford to ignore the retirement income issue—there is too much at stake. Procrastination is risky, as the options to correct a miscalculation or shortfall are simply so much more limited once retirement nears. For today's near-retirees, the time to act and prepare is now.
Near-retirees know where the buck stops on retirement—they understand that they must take personal responsibility for securing a comfortable retirement and not leave retirement to chance.
And yet, a mere 7% of near-retirees have formal, written retirement plans to help them identify and manage financial issues during retirement: generating income, identifying expenses, and effectively utilizing savings. Considering that our respondents are in their late 50s and early 60s, well-educated (51% have a college degree or more), and with above-average household income (56% are earning more than $75,000), it is alarming how little
retirement planning they have done. Without a detailed plan, near-retirees are leaving their retirements to chance.
1,2 How Prepared Are America's Older Workers to Generate a Retirement "Paycheck"? Prudential Financial's Fourth Annual Workplace Report on Retirement Planning, 2005
You can read more about this topic in
2005 Workplace Report on Retirement Planning 
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