As many Americans are preparing to take the leap into retirement, one big question comes to mind: how will they turn their savings into lifelong income?
A new study by Ameriprise Financial, "Pay Yourself in Retirement," finds that only 52% of pre-retirees have a plan to recreate a paycheck in retirement, compared to 85% of retirees. The majority of boomers define paying themselves in retirement as having a sense of independence and control over their personal finances. Yet, the findings show a significant split between retired boomers and those who will soon be heading into their retirement years.
Retirees
· 85% have a plan to pay themselves in retirement; 65% have identified which assets to draw down first
· Pensions are the top source of income
· Less likely to be concerned about spending their money too quickly
· Expect to spend 25 years in retirement
Pre-retirees
· 52% have a plan to pay themselves in retirement
· 401(k)'s and Social Security are anticipated to be the top sources of income
· Twice as likely to rely on income from a job in retirement
· Expect to retire at age 65
Marcy Keckler, vice president of Financial Advice Strategy at Ameriprise Financial, discusses the findings of the Pay Yourself in Retirement study. She provides insight into the importance of developing a plan for your retirement income and four steps anyone can take to feel more financially confident about their transition into retirement.
