Personal Finance News
Survey: 25% of Retirees Still Paying Off Credit Card Debt
A new survey from Nationwide finds that a significant number of retirees are facing financial complications.
About the survey:
Recently, Nationwide commissioned Harris Poll to survey adult investors — including a cohort of retirees — about their finances. Unfortunately, the results weren’t particularly good news.
First, 31% of retirees say that they anticipated being less secure in their retirement than previous generations of their family were. Sure enough, 22% of retired investors admit they worry about being able to afford their monthly bills. One-quarter also say they are still paying down credit card debt while 26% retain a mortgage.
As a result of these realities, 22% of retirees surveyed said that they’re drawing more funds from their retirement accounts than intended. Similarly, 11% are ditching the “4% rule” that suggests those in retirement should only withdraw 4% (adjusted for inflation in subsequent years) of their account funds each year to help ensure that their nest egg lasts for decades.
To help ease financial pressure, 39% reported spending less on entertainment. Meanwhile, 34% say they are traveling less or taking fewer vacations for the same reason.
On the upside, an increasing number of retired investors state that they’ve installed a strategy for protecting their assets against market risk. This year’s survey found 63% of respondents reporting having a plan compared to 54% last year.
What they’re saying:
Commenting on the survey results, VP of Nationwide Annuity Business Development Mike Morrone said, “The picture of life after retirement has changed for many people as economic stressors continue to weigh on retired investors. Now is the time for advisors and financial professionals to check in with their clients and help them remain calm, nimble, and informed in the face of continued economic headwinds, ensuring the plan they have in place continues to position them for a secure retirement.”
Morrone added, “Advisors are recognizing and acknowledging investors’ desire to avoid making the wrong moves in retirement. They can help clients feel more confident about their retirement plans by understanding their goals and anxieties, and helping them protect their savings and plan for income they won’t outlive by reinforcing the value of different retirement solutions and products.”
My thoughts:
Obviously it’s concerning that many retirees are apparently feeling a financial pinch that’s threatening their livelihood. Unfortunately, finding a solution to the problem isn’t easy. In my opinion, though, Morrone does have a point in that working with a financial advisor to both plan before and during retirement can definitely be helpful (and I’d personally prefer a fee-only advisor). Also, while the purpose of this survey was likely to promote annuities, that option may also not be right for everyone — but that’s all the more reason to talk to a licensed fiduciary advisor about your retirement needs.
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