A number of reports have highlighted the problem that many people in their 40s and upwards face when it comes to retirement funding. Many have not adequately budgeted for their retirement years and therefore are unlikely to have the funds necessary to continue with their current living standards and some may even find themselves struggling to meet essential living costs once they retire, as they will not have enough retirement income available.
According to officials, matters are made worse by the fact that many people aged forty and over have no idea how much they can safely withdraw from their retirement savings each year. This is putting many even further at risk of suffering a shortfall when it comes to their retirement funds. Many are taking far more than they can realistically afford to from their nest egg and in many cases they do not even realize what the implication of this will be.
Making a bad situation worse
One official who was involved in a recent study looking into drawing on retirement funds said that many people were making a bad situation even worse by drawing out more than they could afford to. The IPSOS Survey for New York Life was carried out in March 2016 and more than 800 people were polled as part of the study. The results showed that 75 percent of respondents had no idea how much they could safely take out from their savings.
Those that were polled were aged forty and above with assets of $100,000 or more. Officials said that people of this age and in this financial situation should have a relatively high level of financial awareness but this did not appear to be the case based on the study results. One of the researchers involved with the study said that baby boomers had already done a less than stellar job when it came to retirement savings and this situation was making it worse.
A breakdown of the survey results showed that nearly one third of respondents believed that drawing out 10 percent or more a year without any problems. This is despite the fact that people now have longer life expectancy and need to therefore make their retirement funds last for longer. The data also showed that 9 percent of respondents thought that drawing out 15-24 percent each year was all right. Experts said that this could see savings disappear in the space of just ten years, leaving retirees to struggle on with only social security for the remainder of their retirement.