Retirement planning can take developing a strong personal finance strategy at an early age, but some older Americans may still not be financially prepared to deal with the future, even if they saved in the past.
Approximately 52 percent of American retirees took money out of their retirement savings without developing a strong financial strategy, according to a report from PNC. Nearly the same percentage noted that they are increasingly worried about running out of their retirement savings.
Close to 60 percent of retirees explained that they are taking money out of their investments in order to ensure they pay off their expenses, the report showed. More than 60 percent of those between the ages of 65 and 75 are taking money out of their accounts, but 40 percent of the youngest retirees are doing the same.
“Most retirees don’t have a plan for drawing down savings and that is a concern,” said Joseph Jennings, senior vice president of wealth management with PNC. “Using savings to cover expenses indicates that retirees may not have a retirement income strategy in place and are putting themselves at greater risk of outliving their funds.”
A total of 63 percent said that their pensions and Social Security funds are not going to take care of all of their necessary spending requirements during the duration of retirement, the report explained. Despite 35 percent of those polled saying that the amount of money they spend in retirement was on-par with their plan, another 31 percent were unsure.
Americans still aim to build retirement savings
Those younger Americans who are trying to improve their financial situation may be trying to focus on the future. According to a report from the National Endowment for Financial education, half of individuals polled value saving for retirement over any other investment. This was higher than the 47 percent who noted this in 2011.
“People are more in tune with the importance of saving for their retirement years,” said Ted Beck, president and CEO of NEFE. “Economic recovery is inching forward yet many individuals and families still are experiencing difficulty getting back on track. Americans seem to be finding reassurance in more long-term financial-security-based values rather than material values.”
Just 13 percent explained that they are focusing on purchasing a home, which was down from the 17 percent who said this three years ago, the report added.