Clients Underestimate Retirement Income Needs

Although there appears to be room for improvement in how realistically people are planning for their financial needs in retirement, the story isn't all bad, Schwab notes. Thirty-three percent of people feel they are completely prepared for retirement, and another 51% feel at least moderately prepared.

Even people who have a financial plan in place would be well-served to give it a second look to ensure they are on track to meet their retirement goals.

People's sense of retirement readiness seems to provide flexibility in terms of whether or not they will continue working to drive additional income once they retire. Thirty-nine percent of people surveyed say they do not plan to work at all in retirement, and 46% say they might work part time even though they expect to have enough money to live without working. Just 10% think they will have to work at least part time to make ends meet.

Budget-Busting Worries

When asked how their confidence level has changed since last year, 23%  feel more optimistic about being prepared for retirement, while 24% are less optimistic, and roughly half (52%) haven't changed their perspective. Survey respondents did express some financial worries when it comes to retirement planning. More than half (53%) say their primary concern is incurring unexpected expenses in retirement, such as medical costs.

Regional highlights from the survey include:

• Nearly half (47%) of Los Angeles residents surveyed say they didn't plan to work at all in their retirement years, compared with only 30% of Washington, D.C., residents.
• More than half (52%) of Philadelphia residents say they're currently working with a professional advisor on their retirement planning, compared with 40% of Bostonians.
• Washington, D.C., residents are most likely to relocate in retirement (36%), while San Franciscans are least likely to move once they retire (17%).