Financial Fear and the unknown can increase stress
Financial fear is the fear of the unknown, how much money will you need at retirement and the fear of not having enough. A recent survey showed that the most significant fear people nearing retirement have is that they will outlive their retirement funds. In other words a longevity worry. Will your money live as long as you live?
A recent survey showed other significant concerns about retirees. Most retirees and pre-retirees are unsure of where their retirement income will be sourced. It also showed the source of their concern, lack of financial education.
58% of the respondents blamed the lack of financial literacy as a top reason why pre-retirees don’t have enough money saved for retirement. While no specific person or group was the culprit, most blamed the financial industry as a whole. Concerns were lack of education and lack of access to financial education.
Lack of financial education is not only the industries responsibility; it also falls on the shoulders of those searching for information. There are numerous sources for retirement and financial literacy. A solid source for financial education is available through FINRA (Financial Industry Regulatory Authority) http://www.finra.org. FINRA has financial information for the beginner as well as the advanced student.
The survey also found that well over 50% of people at the average retirement age of 65 have to work past their normal retirement age because they cannot live on just their retirement plan and social security. Fear of inflation in the future also becomes a concern for those contemplating a retirement age. Surprisingly only 15% of retirees found that their retirement plan exceeded expectations.
Annuities were included in the survey with surprising results. The survey showed that 56% of people who own annuities are more likely to know how much money they will have every month at retirement compared to non-annuity owners. One possible answer to this awareness could be guaranteed annuities provide. Annuity owners know in advance how much retirement income is available to them at any specific future date.