Tuesday, August 29, 2006

Poll: Pension Envy & Borrowed Time

Teaching and civil service jobs -- with funded and steady pensions-- are looking real good to a lot of people. That's according to a new survey from New York Life.

The survey also has interesting tidbits about the risks of borrowing from your retirement account--a controversial move.

My favorite factoid: "51% of Americans not covered by a defined benefit plan wish they or their spouse had considered a career like teaching, law enforcement or civil service with a traditionally strong pension benefit."

Here is the text:

"Only 10% of Americans understand how much of their retirement savings they can safely spend each year without running the risk of outliving their assets.

According to a groundbreaking survey released today, nearly half of the Americans surveyed between the ages of 41 and 92 overestimated this safe withdrawal rate, which experts benchmark at 4% annually for the typical retiree.

At greatest risk are the more than one-quarter (29%) of all respondents who believe they can spend 10% or more of their savings each year. At that rate, based on historic investment returns, retirees risk running out of money in about 11 years or less – while studies show most of them will live significantly longer than that.

“Lack of knowledge combined with uncertainties surrounding investment returns and life spans mean that even retirees who have substantial nest eggs are gambling with their financial futures in retirement,” said Ted Mathas, executive vice president of New York Life Insurance Company.

Retirement and Social Security

*69% of those surveyed are concerned about major cutbacks in Social Security and half of all respondents are concerned about having to fund their retirement past age 85.

*70% of retirees said managing their retirement savings is as hard as – or harder than – saving for retirement.

*58% thought it important at or near retirement to supplement the income they will receive from Social Security or pensions by purchasing a product like an annuity that provides guaranteed retirement income.

Pre-retirees’ Top Priority: Learning More About Retirement Income

*Pre-retirees felt they should know more about, strategies for generating income in retirement was the top response, cited by 73% of pre-retirees, followed by planning for long-term care or major health expenses (70%).


*56% either want to share responsibility for managing their workplace retirement funds or want their employer to do it entirely for them.

Help For Investors

In an effort to help educate consumers in the critical area of retirement and retirement income planning, New York Life has developed an informational Web site for investors.

The site includes...an interactive quiz on retirement income, retirement income calculators, and a downloadable consumer brochure."

About New York Life

New York Life Insurance Company, a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States."

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