While retirees have worked hard to save and invest for their next
chapter, new research from Ameriprise Financial (NYSE: AMP) finds many
of them aren’t tapping their nest eggs. The new study, Making Money
Last, reveals only 21 percent of retirees feel confident about
drawing down their assets. In fact, nearly seven in 10 (68 percent) of
respondents have not begun to withdraw their money aside from taking
required minimum distributions. Ameriprise surveyed more than 1,000
retirees with at least $100,000 in investable assets to explore how they
manage their finances. Half of the respondents retired from their
primary job when they were in their 60s and 36 percent retired in their
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“After working, saving, investing and making sacrifices for decades to
build a nest egg, transitioning to spending can be challenging,” says
Marcy Keckler, vice president of Financial Advice Strategy at Ameriprise
Financial. “Retirement requires individuals to think differently about
money. Having a plan in place to manage their finances can help retirees
feel confident about spending their assets and address the fears that
may be holding them back.”
Savings Shortfall – Perception or Reality?Many respondents
retired with a substantial amount of money – in fact, the median savings
they had was $839,000. However, for some retirees there’s a good reason
behind their reluctance to spend. A quarter of respondents say they are
not sure whether their money will last throughout their lifetime. This
feeling of uncertainty is underpinned by a savings gap between what some
retirees thought they would need versus what they accumulated. The
Ameriprise study reveals 1 in 4 retirees fell short of their savings
goal by at least $250,000.
Not Outliving Money is a Top PriorityWhether they socked
away the amount of money they desired or not, retirees are determined
not to outlive the funds they accumulated. Managing investment risks and
returns is the number one action retirees are taking to make their money
last. This is also a topic that 59 percent of retirees view as complex.
Retirees are seeking professional financial advice as the second most
common action, followed by reducing debt and doing research to become
more knowledgeable about investing, which are tied as the third most
common action they are taking to sustain their money.
Retirement Income – Social Security Questions PersistBeyond
savings and investments, most retirees say pensions (72 percent) and
Social Security (71 percent) are important to their retirement income.
In fact, 76 percent of those surveyed say they have started receiving
Social Security and of these respondents nearly half (49 percent)
claimed the benefit between the ages of 62 to 64. Over a third (34
percent) of retirees who have not started collecting Social Security say
they do not know when they will claim it, while 20 percent say they plan
to receive the benefit between the ages of 62-64 and almost the same
percentage of respondents (21 percent) say age 70 or older.
The Complexity BarrierOver half of those in retirement (53
percent) feel understanding the tax ramifications of draw down
strategies is complex. Similarly, 46 percent of respondents express this
sentiment when it comes to understanding how to establish a retirement
“Retirees may miss out on the full and rich life they dreamed of by not
spending the money they worked hard to accumulate,” says Keckler. “A
financial advisor can help retirees develop a strategy to withdraw their
assets effectively so they don’t outlive their money.”
For more information about the study, please visit our research page at Ameriprise.com/makingmoneylast.
About the surveyThe Making Money Last study was
created by Ameriprise Financial, Inc. as part of the Ages, Stages &
Money survey, which was conducted online by Artemis Strategy Group
December 8-21, 2017 among 3,019 U.S. adults ages 30-79 with at least
$100,000 in investable assets. The respondents included 1,075 retirees
between the ages of 40-79. For further information and details about the
study, including verification of data that may not be published as part
of this report, please contact Ameriprise Financial or go to Ameriprise.com/makingmoneylast.
About Artemis Strategy GroupArtemis Strategy Group (www.Artemissg.com)
is a communications strategy research firm specializing in brand
positioning, thought leadership and policy issues.
About Ameriprise FinancialAt Ameriprise Financial, we have
been helping people feel confident about their financial future for more
than 120 years. With extensive asset management, advisory and insurance
capabilities and a nationwide network of approximately 10,000 financial
advisors, we have the strength and expertise to serve the full range of
individual and institutional investors’ financial needs. For more
information, or to find an Ameriprise financial advisor, visit ameriprise.com.
Ameriprise Financial Services, Inc. Member FINRA and SIPC.© 2018
Ameriprise Financial, Inc. All rights reserved.
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