RICHMOND, Va, Nov. 7, 2013 /PRNewswire/ -- Consumers have
unrealistic expectations about when they will retire, how much
money they will need in retirement and where that income will come
from, according to The Future of Retirement Income, a survey
released today by Genworth.
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"Unpredictable retirement dates, compounded by misperceptions
about retirement expenses and the uncertain futures of traditional
sources of retirement income may leave many retirees at risk for
outliving their retirement savings if they don't prepare properly,"
said Eric Taylor, Vice President and
National Sales Manager for Annuities at Genworth.
"The findings underscore the need for flexible financial
solutions that provide reliable retirement income, such as fixed
annuities."
The survey findings highlight how:
Retirement Timing is Often Beyond Our Control
The Genworth study reveals that while nearly three-fourths (73
percent) of pre-retirees are confident they will retire as planned,
only 48 percent of actual retirees retired when they expected.
Among the more than 1,300 people surveyed, including more than 700
retirees, 46 percent retired sooner than planned.
Although the primary reason was due to job loss (36 percent),
health issues (17 percent) and family issues (12 percent), an
additional 25 percent said they retired early because they just
"didn't want to work anymore."
Retirement Expenses Don't Add Up
Expectations about retirement expenses also don't match
reality. More than half (52 percent) of pre-retirees expected
expenses to decrease in retirement, when in fact 65 percent of
actual retirees found expenses stayed the same or even increased in
retirement.
The vast majority (77 percent) of retirees found that their
general living expenses increased in retirement. More
specifically, retirees experienced increases in healthcare costs
(41 percent), real estate related expenses (26 percent) and money
spent on dependents (18 percent).
A small minority (15 percent) found that their retirement plan
exceeded expectations and 12 percent had more money saved than they
anticipated.
Retirees Rely On Uncertain Income Sources
Retirees surveyed estimate 44 percent of their retirement income
comes from pensions and an additional 28 percent comes from Social
Security. Conversely, pre-retirees predict over half of their
retirement income will derive from sources subject to market
volatility and vulnerable to rising interest rates, including
qualified retirement plans (27 percent), IRAs (13 percent) and
stocks and bonds (12 percent).
Compounding the problem, only 50 percent of consumers who work
with financial professionals have a written plan for
retirement. And just two out of five have distribution plans
for taking income in retirement.
Annuity Ownership Brings More Certainty
The survey also looked at consumers' views about annuities in
the context of retirement income and found that fixed annuity
ownership brings more certainty and confidence. Fifty-six
percent of annuity owners know how much money they will have each
month in retirement, compared to 48 percent of non-owners.
Additionally, annuity owners were significantly more confident than
non-owners that their current retirement plans would afford them
the retirement they desired.
The survey also showed that the majority of fixed annuity owners
are satisfied with access, expenses and growth.
"For consumers looking to reduce uncertainty related to their
financial futures, fixed annuities can be a great solution," Taylor
said. "Fixed annuities offer protection against market
downturns, the opportunity to create guaranteed lifetime income,
and can help offset other portfolio risks such as inflation and
rising interest rates. As our survey finds, fixed annuities offer
welcomed guarantees to consumers when it comes to retirement income
planning."
To learn more about how fixed annuities can protect retirement
money and guarantee a lifetime income, visit Genworth's recently
launched annuities solutions website containing planning tools and
educational videos, as well as more information about The Future
of Retirement Income Study.
Genworth can also be found online through its social media
platforms: Facebook and YouTube.
About the Study
During 2012, Genworth conducted the Retirement Income Planning
study in conjunction with Directive Analytics, a third party
research administrator. The study consisted of several
phases, to include in-depth interviews, focus groups and
quantitative surveys with both consumers and financial
professionals. In October 2012,
an online, quantitative survey was completed by 1,340 retired
consumers and pre-retirees between the ages of 40 and 80 with at
least $50,000 in household
income. In December 2012, an
online, quantitative survey was fielded among 400 financial
professionals with at least one year of experience. Presented
results represent statistically significant findings tested at 95%
and 90% confidence intervals.
About Annuities
Annuity guarantees are based solely on the claims paying ability
of the issuing insurance company.
Withdrawals/surrenders have the effect of reducing the contract
value and death benefit. Withdrawals/surrenders of taxable
amounts are subject to ordinary income tax and if taken prior to
age 59 ½, an additional 10 percent federal penalty tax.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500
insurance holding company dedicated to helping people secure their
financial lives, families and futures. Genworth has leadership
positions in offerings that assist consumers in protecting
themselves, investing for the future and planning for retirement --
including life insurance, long term care insurance, and financial
protection coverages -- and mortgage insurance that helps consumers
achieve home ownership while assisting lenders in managing their
risk and capital.
Genworth operates through three divisions: U.S. Life Insurance,
which includes life insurance, long term care insurance and fixed
annuities; Global Mortgage Insurance, containing U.S. Mortgage
Insurance and International Mortgage Insurance segments; and the
Corporate and Other division, which includes the International
Protection and Runoff segments. Products and services are offered
through financial intermediaries, advisors, independent
distributors and sales specialists. Genworth, headquartered in
Richmond, Virginia, traces its
roots back to 1871 and became a public company in 2004. For more
information, visit genworth.com. From time to time, Genworth
releases important information via postings on its corporate
website. Accordingly, investors and other interested parties are
encouraged to enroll to receive automatic email alerts and Really
Simple Syndication (RSS) feeds regarding new postings. Enrollment
information is found under the "Investors" section of
genworth.com
SOURCE Genworth Financial, Inc.