A quarter of consumers don’t have a financial plan, survey finds

A report released yesterday by the Alliance for Lifetime Income and Cannex suggests just under half of Americans believe their retirement savings and income will last them a lifetime, down 13% from a year ago. one year old.

“Nearly a quarter of consumers have no type of financial plan and another quarter have goals or a direction in mind, but not a well-developed financial plan,” the report said.

Cannex is a data provider that offers pricing information for banking and annuity products. The Alliance for Lifetime Income is a consortium of financial services companies that educates investors on income solutions and promotes products such as annuities.

According to the report, titled “Report on Protected Retirement Income and Planning,” the two organizations surveyed 2,025 consumers with the help of the Artemis Strategy Group earlier this year, speaking to respondents aged 45. at 75 years old. Thirty-five percent of respondents were either fully retired or working part-time in retirement.

Half of those surveyed said they were more interested in protecting their retirement income since the Covid pandemic began in 2020. Only 48% said their retirement savings and income would sustain them for life, a down from 55% in 2021, according to the report. . Additionally, 74% of those with an annuity believed that their savings and income would carry them to the end of their lives, while only 43% of those without said the same.

Sixty-three percent of respondents said they worry about their finances several times a month, several times a week, or every day.

The report suggests that the lack of concrete planning is a major cause for concern.

“Nearly two-thirds of individuals worry about their finances several times a month or more and a quarter worry about their finances every day,” reads a summary of the report. “Nearly a quarter of individuals have no financial plan, while 28% have a general direction in mind, but no financial plan to get there. Nearly half of non-retired people aged 45 to 75 save less than 10% of their annual income for retirement.

Seven in 10 respondents said they would be able to fund their basic needs in retirement, but only a third would be able to fund their “wants”, according to the survey. And around 31% of those not yet retired thought they had a high or moderate chance of being forced into early retirement when they hadn’t planned to for some extraneous reason. .

However, among those who worked with a financial professional, 73% believed their savings would last a lifetime, while only 36% of those who did not work with a professional said the same.

“Only three in 10 who are not retired and have a finance professional have spoken with their [planner] and have a plan in place if they need to retire early,” the report said.

The survey was conducted from April 28 to May 31, 2022.