The Contradictions of Retirement Planning

The concept of retirement is laden with many contradictions in both attitude and preparedness, according to a survey of pre-retirees.

Among the many contradictions revolving around the concept of retirement, a majority of pre-retirees are looking forward to retirement, but few think it will actually be better than previous generations.

The 2014 Retirement Income Strategies and Expectations Survey from Franklin Templeton Investments found that the concept of retirement is laden with contradictions in both attitude and preparedness.

Just a quarter of respondents expect to have a better retirement than the previous generation, while 41% believe it will be worse. Meanwhile, 72% are still looking forward to retirement.

“Americans have long struggled with preparing for the realities of retirement,” Michael Doshier, vice president of Retirement Marketing for Franklin Templeton Investments, said in a statement. “The survey uncovered several contradictions related to the degree of understanding and often divergent approaches to retirement.”

Retirement outlook is also heavily influenced by age. According to survey, the younger the respondent, the earlier the expected retirement age. Most assume that if they do not have enough income to retire as planned, then they’ll simply “retire later,” which may not be possible.

“The difficulty is that retiring later and introducing new sources of income aren’t always viable solutions to meeting retirement income needs,” Doshier said. “Our survey shows that about a fourth of retirees retired not by choice but due to circumstances beyond their control.”

After middle age, respondents are less likely to retire later and more likely to reduce retirement expenses or lower their lifestyle expectations. According to the survey, 79% of current retirees recommend to save early, often, and consistently.

There’s also a significant gender gap when it comes to retirement attitude and concerns. Women are more likely to be less confident with or not understand their retirement income plan. They are also more likely to consider their own needs or those of their children and grandchildren when planning for retirement. Men are slightly more likely to consider the needs of their spouses.

“There are a few simple steps you can take to prepare for what’s next, including acknowledging your own retirement goals and concerns, learning about the various sources of income and matching them to your likely expenses,” Doshier said. “A financial advisor can help you establish a retirement income investment plan tailored to your future needs and aspirations.”