October 13, 2011

Retirement Concerns: New Study Takes a Look

Having a Satisfying Retirement has never been easy. But, there is no argument that the last several years have made it even more of a challenge. It is hard to read anything about this stage of life that doesn't spell out all the difficulties are face. 

A week or so ago I was given the results of a bipartisan, national survey. Conducted by Lake Research Partners and Public Opinion Strategies, it shows widespread anxiety over having the means to maintain a comfortable standard of living throughout retirement. It shows that anxiety continues to grow, with near universal concern about having enough to make ends meet throughout retirement. The poll was commissioned by Americans for Secure Retirement (ASR), a broad-based coalition of more than 70 organizations committed to raising awareness of policy issues related to retirement security.

“What we’re seeing is significant, and increasing, concern from Americans of all political stripes about falling short financially during retirement,” said Bill McInturff, founder and partner of Public Opinion Strategies. “Not only are Americans concerned about their own financial health, but they also express widespread concern over how the continued contentious debate in Washington could further undermine what they are planning for in retirement. Even those who feel we must make dramatic cuts to deal with the debt think Congress needs to identify concrete ways to help Americans deal with further retirement instability.”

The survey reveals pervasive anxiety over how efforts to reduce our national debt may impact retirement security. Regardless of party affiliation, the majority of voters are concerned that cuts to Medicare or Social Security would have too significant an impact on retirement or that, if cuts are made, Congress must look for other ways to help Americans better plan for retirement. A majority of respondents also expressed support for proposals such as tax incentives to help save for retirement.

Additionally, the poll findings include:

88 percent of voters expressed concern about “being able to maintain a comfortable standard of living throughout retirement,” with 52 percent of those individuals indicating they are “very concerned.” This is up 15 percent from just last year.Concerns about being able to maintain a standard of living in retirement are extremely high across very diverse demographic groups: 

White (86%)
African-American (88%)
Hispanic (96%)
Those without any investments (93%)
Those with over $100,000 in investments (84%)
Financial elites (81%)
Retired (81%)
Not-retired (89%)

A full 50 percent of voters believe lawmakers should not cut Medicare or Social Security because it would have too significant an impact on retirement.  A plurality of Republicans and Tea Party supporters (34 percent of self-identified Tea Party supporters, 39 percent of Republicans) and the majority of Democrats (62 percent) express this viewpoint.

88 percent of voters view tax incentives to help save for retirement as important. This includes 81 percent of Tea Party supporters, 83 percent of Republicans, 86 percent of Independents and 94 percent of Democrats.

“Continued economic uncertainty, high unemployment and instability in the stock market have placed a growing concern on retirement security, and it’s an issue that transcends party affiliation,” said Celinda Lake, President of Lake Research Partners. “As all eyes turn toward the 2012 election cycle, it’s clear that fears regarding retirement security will play out big not only for Democratic voters, but even the most conservative of Republicans as well.”

“We commissioned this poll to illustrate the overwhelming anxiety that exists about having the means to live comfortably in retirement,” said Shannon Hunt, Executive Director of Americans for Secure Retirement. “As policymakers look for ways to address our national debt, they must find ways to generate peace of mind among Americans as they look toward retirement. Promoting solutions that provide guaranteed lifetime income – for example, annuities –would go a long way toward balancing these concerns.”

The poll was conducted as part of a national omnibus survey of 800 registered voters. The survey took place from September 10-13, 2011. More information, including a detailed breakdown of the poll results, can be found by clicking on this link.

What I find important about this survey is the broad-based, non-partisan approach to data gathering. Frankly, I had never heard of the Americans for Secure Retirement before, but am  impressed with the diversity of groups it represents. If you are interested, a list of the groups included is available here.  The only obvious caveat: the life insurance industry is well represented in ASR. Therefore the recommendations for annuities is to be expected. But, to their credit, all sorts of folks were interviewed, including those with no history of investments or ownership of insurance industry products. 

Over the past 17 months I have written thousands of words that the path to a satisfying retirement lifestyle is based on so much more than just solid financial planning. I continue to firmly believe that to be true. Strong relationships, focusing on your health, feeding your passions and creative side, travel, even working after retirement are part of the package.

But, for many the effect of the economic mess we are in is beginning to drown out some of that message. While I am not sure what the new reality of retirement should mean to this blog. be aware I understand we are seeing a shift in attitudes and it is important that I reflect it.

At the same time,I am encouraged when I read stories like this one. A lady suffered substantial losses, tried to be upset and bemoan her fate, but couldn't do it for more than 6 hours! She has done what she needed to do, has adjusted and moved on. It is an affirming story that I urge you to read.

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  1. Great article! Skydiving? Really? A brave soul. And just to be clear, I do think the whole travel thing is highly over rated anyway. All that packing, unpacking, flying, standing in long lines at the airport, not knowing where you are going....bah.

    I am addicted to my art studio. I can't be away from it for more than a day or 2 or I go bonkers.

    Replace travel with a creative pursuit and there 'ya go! Happy Happy.....

  2. Bob,
    Finally an article and woman/retiree who is telling it like it is. In order to retire today you must do three things: work part time, take your Social Security check and balance the rest with savings. The retiree highlighted in the article is doing all three and managing.

    She downsized to a 900 sq foot home, faced the fact that she may not be traveling as she planned and her main goal is to survive. There are millions of retirees who are living almost the same as this woman and the faster all of us admit to it, the better. There is nothing to be ashamed of. This is the new 'retirement reality'.

    Personally, I think if you can ascertain and accomplish what this woman has, you should consider yourself fortunate, successful and lucky!

  3. Roberta,

    After just getting back from nearly 3 weeks in Hawaii I can relate to the travel hassle. Our plane flight home featured a seat kicker, a screaming baby for most of the 6 hours, and a dinner service of a turkey sandwich and trail mix.

    It is good to be home (except for the bills, yard work, and long to-do lists).

  4. Morrison,

    I totally agree. I was very pleased when that story arrived just as I finished putting the post together. I love her attitude and can-do spirit. She is realistic and positive.

  5. I admire the woman in the article, too. She articulated so well what the middle class (young/old, retired/unemployed/working) folks are feeling about the obscene amounts of money being made in the stock market at the expense of the rest of us.

    I wouldn't be surprised if her next adventure would be to Occupy Wall Street in the city nearest her! I'm considering doing that myself!

  6. Anonymous,

    Watching the changes in our society has become a full time job. What comes next? The pressure is building for something of substance to happen.

  7. One other thought I'd like to share. In retrospect, I am glad I did my traveling while I was young (20's, 30's and 40's). I've been everywhere I wanted to go and did my travel any way I wanted to (i.e. camping, hostel,frugal & luxurious).

    My experience has been that as I got older the more comfort I demanded. Comfy accommodations, room service and all-included resort-type amenities were on my wish list. These things, however, cost money. And I found that in my 50's and now 60's, I can't 'rough' it anymore.

    My last straw came in 2007 (when I was 56) and on a 15 day tour of Italy. The last two days I spent, in Milan, in BED. I was exhausted and just couldn't make it to view The Last Supper. Literally. When I got back home, I was jet lagged for 3 whole days. Totally cured me from travel. Thus why, I am most glad I have already done most of my traveling while young.

    I'm very content to stay home or drive to a weekend trip for a vaca. Traveling today just isn't what it used to be.

    I had a better time strolling down the Champs D'Elysee (?) when I was in my 20's and carefree than struggling with arthritis in my 50's.

    Just my 2 cents: travel while you are young AND have a steady paycheck.

  8. Morrison,

    I addressed travel and health in an earlier post: do it while you still can even if it means overspending, or budget for it and do it when you can afford it? Opinions were mixed.

    After this trip to Maui my wife and I have moved into the "do it while we can" camp, even if it means taking money from the IRA. We see too many folks in wheel chairs or with walkers, or simply too frail to do anything more adventurous than go to a nice resturant. There will be plenty of time to be complete home bodies.

    We traveled a lot in our 30's, 40's and 50's and aren't prepared to quit quite yet. But, I HATE airplane travel.

  9. In my humble opinion- the woman in the article made a crucial mistake- not paying off her house! Her second problem was divorce.

    We travel often. I, 54, travel more often than my husband, 61. My eight trips this year have revolved around work or family. I took a short job this year that allowed for the travel for the rest of the year. Next year I will be using money from substituting. Since we are almost always with family- the travel money stretches further. Groceries are much cheaper than eating out.

    I swore off long distance travel to Hawaii when a flock of birds hit our mainland bound plane five years ago. We limped back to the island- very low and very slow. Where am I going in March? Back to Hawaii. I love it there and promise this is the last time....make all those connections for flowers and fabric now....not returning....for at least five more years. (Where else can you get macadamia nut pancakes with banana syrup?) I am hoping to see at least one whale on the north shore.
    Next year will, most likely, see us in Europe playing with our grandchild and his parents. I am looking forward to many trips to come.

    I see my husband's sixties as the most important time to travel. He is fit (much more than me) but his family history isn't so great. I am hoping we live close to family when he enters his 70s. Travel will be cut, but family time will really kick in.

    Last year was all about worry about retirement money. Now that we have done it for a year, worry is leaving- care is still in the picture. It is much less overwhelming knowing that others, like you, are enjoying their time as well.
    Great article. We live on about 1/3 what we did when we both worked- and are happy. It makes me sad that so many think they need so much more in order to be happy.

  10. Jannette,

    Yes, go back to Hawaii. There is no place like it on earth. Do you know that no plane, ever, has had to ditch on the flights between Hawaii and the mainland? Those planes are very well maintained, but birds are not so well mannered!

    You have made many valid points that don't need my 2 cents worth. I'm glad Betty and I have made the decision to spend now to travel now. There will be plenty of years to stay in town.

  11. m an older parent and took my kids to venice and florence for my son's high school graduatin in my mid fiftees. I never liked camping, even at twenty. I just have to save for it and plan it-and try to avoid air travel whenever its feasable (in otherwords, if it's not over open water). I hope to cruise to the cayman islands in the spring...

    Even though I have a couple of income streams, given a the choice I will probably downsize inf ive years so that I dont have to work in my seventies

  12. Bob, I would be interested to hear what you suggest would be a "balanced" portfolio. It seems to me that people have relied on the stock market too heavily and failed to have a balanced sayings program and real estate, etc. Do you think they could have protected themselves to some extent if they had not "put all their eggs in one basket".

    We were allowed to choose how our money would be invested in our retirement plan here in Oregon. My husband diversified and it has worked out reasonably well for us.

    What do you think?


  13. Barb,

    Like you I don't enjoy camping. It just isn't my thing.

    We visited with a friend in Maui who moved from Scottdale to Maui and in the process downsized from 3,000 sq ft to just over a 900 sq feet condo...and couldn't be happier. He doesn't feel cramped at all. Of course, his view everyday is of the ocean.

  14. b,

    I avoided the stock market, for the most part, during all the time I was savings and investing. I did have certain mutual funds but never became involved with individual stocks. My risk tolerance is low and the emotional swings of the market based on rumor, fear, and greed were just too uncertain for me.

    My various financial advisers over the years understood that and kept me diversified in conservative things like bonds, CDs (when the rates were good), various treasury investments, and high quality corporate stuff.

    All the investment books say being as careful as I was won't work, but it did for two reasons: I started in my late 20's and I saved 25% or more of my income each year. That allowed even a very conservative approach to use compounding interest to build our nest egg.

    Since I was self-employed for 90% of my career I never had a company 401(k), so didn't sink a lot of my money into one basket.

    We also owned 4 rental proprieties and cashed out at the right time.