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Financial worry affects most individuals. According to the 2024 Defined Contribution (DC) Plan Participant Survey from J.P. Morgan Asset Management, future retirees feel less secure about what comes next. Only 43% of the people surveyed strongly or somewhat agree that their savings will last throughout their lifetime, down from 57% in 2021, when the survey was last administered.
The survey asked over 1,500 participants in defined contribution plans to give their opinions on retirement, savings, and other issues impacting personal finance. It found that 61% of those surveyed had at least three months of living expenses saved. That was down from 73% in 2021, which backs up other data showing that many people have spent their pandemic savings. Another study from Prudential indicated that 35% of people 55 years old wouldn’t be able to put together $400 for an emergency.
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While 63% of people think they should be saving more for retirement and most people listed retirement savings as the top goal, the study showed that they don’t know how to get there. Only 43% of those surveyed expressed confidence that their savings would last through their golden years, down from 57% in 2021.
The Quest For Income
Investors who are planning for retirement are looking beyond Social Security. A June Gallup poll showed that 80% of people worry that their full Social Security benefits may not be there when needed. The J.P. Morgan Asset Management study revealed that 77% of those surveyed are worried about building an income to last through their entire retirement.
People said that one of the top motivators for saving more would be to add a guaranteed lifetime income option within the plan, and 80% said they would be likely to leave their money in a plan that could generate monthly income in retirement. “While it’s no surprise that participants seek retirement income support, it’s particularly noteworthy that guaranteed income options are highly attractive and can even motivate increased savings,” said Alexandra Nobile, Retirement Strategist at J.P. Morgan Asset Management.
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They are also worried that the movements of the financial markets could hurt their retirement plans. Of those surveyed, 78% are concerned that a significant market downturn could cause the value of their retirement accounts to plummet before retirement. That was up 2% from three years ago. They are also afraid that inflation could jump when they retire, further diminishing the value of their accounts. This study conflicts with data from a recent Charles Schwab survey that showed fewer people saw inflation as an obstacle to retirement.
One message that the report highlights is that talking to financial professionals can make a difference. While only 43% of those surveyed said they were confident that their savings would last throughout their lifetimes, that number went up to 50% for those working with financial advisors. People seem to want more input; 75% said they wanted guidance even if they eventually made decisions independently. However, only 54% said they received guidance from financial advisors about their 401(k) accounts.
Many people are dreaming of an easy button for investing. Six out of ten participants wish to completely hand over their retirement planning and investing to a professional. While no foolproof button exists, the survey highlights the importance of thinking about regular income, a track many savvy dividend investors are already on.
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This article Study Shows Nearly Eight Out Of 10 Are Concerned About Finding Retirement Income That Will Last Their Lifetimes originally appeared on Benzinga.com