Advisers Improve Retirement Peace of Mind

As part of its retirement study, Merrill Lynch Wealth Management developed an index to measure the current level of national retirement peace of mind.

Based on averages of responses to five questions, the national “Retirement Peace of Mind Index” at the time of the survey was 5.3 on a scale of 1-10. The index was calculated from responses to the following survey questions:

  1. I feel content and comfortable about how I will spend my retirement years;
  2. I have many worries about what might happen during my retirement;
  3. Thinking about my retirement gives me feelings of security and stability;
  4. I feel anxious and uneasy about how I will support myself and my family during retirement; and
  5. I feel well prepared for whatever may happen during my retirement.

The survey from Merrill Lynch Wealth Management in collaboration with Age Wave found retirement peace of mind varies by gender, wealth, and use of a financial adviser. The index was 6.3 for those who work with a financial adviser versus 4.7 for those who do not.

“People definitely benefit from professional assistance when it comes to saving for retirement. We found that those who use professional assistance, such as advisers, were 1.5 times more likely to get better results in planning and saving for retirement versus those that tried to do it on their own,” said Ken Dychtwald, Ph.D., founding president and CEO of Age Wave, during a press call.

The key elements identified by survey respondents for creating retirement peace of mind include:

  • Financial security: confidence in safety of investments and having sufficient resources for retirement – 60%;
  • Health optimization: confidence in having resources and reliable care to maintain health in retirement – 14%;
  • Family well-being, feeling assured that family members will be financially secure and can rely upon each other when needed – 14%; and
  • Personal purpose: having meaningful retirement goals, faith/spirituality, social connections, and personal legacy – 12%.

Beyond core financial advice, sorting through health care and long-term care options is the top issue retirees and pre-retirees are seeking advice about, cited by 75% of respondents. Seventy-one percent are seeking advice about making sense of Social Security and employer pensions, and 58% seek help with inheritance and legacy matters.

The Merrill Lynch survey was completed in January 2013, in partnership with Age Wave, and included more than 6,000 respondents age 45 and older. Data is based on more than 3,000 responses from the general population. In addition, select study findings are based on an oversampling of an additional 3,005 affluent respondents with $250,000 to $3 million in investable assets (including liquid cash and investments, but excluding real estate).

To Your Successful Retirement!

Michael Ginsberg, JD, CFP®



Men & Women in Sync when it comes to Retirement

Men and women have similar expectations and attitudes toward retirement, according to a recent Employee Benefit Research Institute survey.

The 2013 Retirement Confidence Survey found that the differences between how the sexes view retirement are negligible with a few notable exceptions. Women are more likely than men to view Social Security as a serious source of income in retirement with 83 percent of women and 72 percent of men reporting that they will be counting on it.

When it comes to retirement confidence, men are more likely than women to feel very confident about having saved enough money to live comfortably in retirement and to take care of basic expenses with 17 percent of men reporting that they will have enough to live comfortably versus 10 percent of women. Thirty percent of men and 21 percent women report that they have enough to take care of basic expenses.

The rest of the survey leads us to conclude that men and women perhaps are not so different after all, at least when it comes to retirement.

Women are just as likely as men to indicate that they have attempted to calculate how much money they will need to live in retirement. Men and women also want to retire at the same age with the median expected age at 65. However, men are also more likely than women to report that they will retire before 60 and after 70.

Both sexes are equally likely to report that their retirement plans have changed in the last 12 months with the majority of both men and women saying that the change translates to retiring later than they originally had hoped.

Interestingly, although women typically live longer than men and therefore incur more medical bills and need more income, both sexes report that they will need to accumulate less than $250,000 for retirement.

To Your Successful Retirement!

Michael Ginsberg, JD, CFP® 


Middle Class Financially Unprepared For Serious Illness, Study Says

According to a recent survey prepared by Washington National Institute for Wellness Solutions, most middle-income Americans are financially unprepared to face a serious illness.  Only 10 percent of those surveyed felt financially prepared for a family emergency or a serious illness such as cancer, heart disease, stroke or Alzheimer’s disease.

The report, Middle-Income America’s Perspectives on Critical Illness and Financial Security, was based on a survey of 1,001 U.S. citizens, between the ages of 30 to 66 with annual household incomes of $35,000 to $99,999.

Ninety percent say they do not have the resources to pay for a serious illness. Most say they would have to draw on savings to pay costs not covered by insurance, but most have little savings.

The survey showed 75 percent have less than $20,000 in savings; half have less than $2,000; and one-quarter have no savings. Respondents said they would have to turn to credit cards (28 percent), loans from family or friends (23 percent) or loans from financial institutions (19 percent). Another 23 percent said they do not know what they would do if faced with a serious illness.

A significant number of Americans believe they would never get over the financial implications of a serious illness. For instance, 38 percent believe they might never recover from a battle with cancer and 45 percent believe they would never recover financially from an Alzheimer’s or dementia diagnosis.

Despite these problems, 88 percent of middle Americans have not talked with loved ones or advisors about potential care-giving options and 60 percent have not discussed financial planning for critical illness.

It is for the reasons highlighted in this survey, that I always encourage clients to have at least 3 to 6 months of living expenses saved in liquid savings.  I also encourage clients to either obtain long-term care insurance to fully or partially fund the costs associated with long-term care situations.

Please call or email me for more information about how to best structure your financial plan to protect you from these devastating life situations.

To Your Successful Retirement!

Michael Ginsberg, JD, CFP®