Retirees and pre-retiress have a lot in common when it comes to funding retirement. They all intend to rely on the same six major funding resources, but those who are still working say they plan on depending far more on their personal resources than Americans already in retirement according to a new Gallup Wells Fargo poll.
The survey found that 48% of retirees consider social security to be the #2 major source of income during their later years, while non-retirees 28% percent consider it to be their 6th major source of income later in life.
“In one sense, these findings are encouraging. Many American investors who have yet to retire recognize the need to provide their own funding for retirement and are acting to make that happen,” said the report. “Further, investors are hopeful about retirement, with 72% of retirees and 62% of those yet to retire believing retirement is/will be a fulfilling phase in their lives.”
Despite the significant drop in home values the last few years, 36% of pre-retirees markets look to the equity in their home as a major source of retirement funding — similar to the 32% of current retirees. The report doesn’t say whether the respondents plan on selling their home, taking out a HELOC, or using reverse mortgages.
About three in four investors say the major factor that will determine when they are financially able to retire is the value of their investments. This reflects non-retired investors’ reliance on their own resources to fund their retirement.
Two in three investors rank their personal health and the cost of healthcare as key determinants of their financial ability to retire. This is likely one of the reasons why so many Americans continue to worry about the full implications of the healthcare reform legislation passed last year.
“On the other hand, less than half of investors — who represent roughly the top third of Americans in terms of investable assets — are confident in their ability to achieve a comfortable retirement or maintain their lifestyle without working in retirement,” said Gallup. “This lack of confidence concerning retirement among this more financially secure group of Americans does not bode well for those who are not as well off. Maybe that is why retirement remains high on Americans’ worry list.”
View a copy of the report here.