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Retirement: Investors Prepared, but Worries Linger

by Raksha Arora, Business and Economy Editor

In 2002, Americans spent more time planning for vacations than planning for their retirement, according to the 2003 Employee Benefit Research Institute's Retirement Confidence Survey. And yet these days it's more important than ever to plan for a financially secure retirement, sooner rather than later. The latest UBS/Gallup retirement study* shows that half of non-retired investors are worried they will run out of financial assets while they are still alive.

Best Laid Plans

The percentage of non-retired investors who feel comfortable about the amount of retirement planning they have done has remained largely unchanged over the last six years. In each of the three UBS/Gallup retirement surveys conducted since 1998, slightly more than half of non-retired investors have said they feel prepared for this stage in their lives. Interestingly, when currently retired investors are asked in hindsight how well prepared they were for retirement, 67% report that they were comfortable with the amount of planning they did.

This year, almost two-thirds (64%) of non-retired investors say they have a plan for retirement, but less than half that number -- 27% -- have documented that plan in writing. These numbers have not changed much since 1998, indicating little progress toward more detailed and systematic retirement planning.

What's more, non-retired investors are no more likely now than they were six years ago to seek professional advice to help them plan for retirement. In 1998, one in every two non-retired investors (50%) said they had an investment adviser; that percentage remains the same today. About the same percentage of retired investors -- 48% -- report that they have the help of an investment professional.

Most investors subscribe to the view that it is not necessary to have an investment adviser. Fifty-five percent of non-retired investors say that they do not need an investment adviser to help them achieve their investment goals, and an even larger percentage of retired investors -- 61% -- express this view.

Bottom Line

More than a third of non-retired investors have no written plans for their retirement finances, and perhaps most disturbingly, 51% say that they are at least somewhat concerned that they might not have enough financial assets to support them through retirement. Retired investors are only slightly better off, with 35% worried that their financial assets will not tide them over until the end of their years. As a Social Security crisis looms on the horizon, non-retired and retired alike would be well advised to get proactive and lay some firm plans for the future.

*The special retirement survey is based on a telephone survey of a nationally representative sample of 612 investors who are not retired and of 412 investors who are retired. To be classified as an investor, one must have a minimum of $10,000 in investable assets. All interviewing was completed between July 29-Aug. 1, 2004. For results based on the sample of non-retired investors, the margin of error is ±4 percentage points at the 95% confidence level. For results based on the sample of retired investors, the margin of error is ±5 percentage points at the 95% confidence level.


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