Only one in four of the 33 million U.S. pre-retirees (non-retired, aged 55-70) say they feel “very prepared” for retirement, compared to 30percent of pre-retirees surveyed in 2010, according to a new study by LIMRA.
On average, surveyed pre-retirees believe they will need less than two-thirds of their current income during retirement. This is less than the 70-80 percent level commonly recommended, LIMRA reports.
In addition, pre-retirees say they will need to withdraw nine percent of their assets annually to pay basic living and discretionary expenses. Based on historical investment returns, this withdrawal rate will result in some pre-retirees running out of money in retirement, which is likely to last 20 or more years, the survey adds.
The study also finds that two-thirds of pre-retirees expect to work in retirement. Prior LIMRA research indicates that this is improbable as less than a third of current retirees report having jobs. In addition, almost half of current retirees retired before they planned — half involuntarily — often due to layoffs or personal or family illness.