LOS ANGELES (7/14/11)--Credit unions should prepare for a renewed focus on retirement planning and education as Americans re-set their post-recession retirement expectations. According to a new study, Americans emerged from the recession with a significant shift since 2001 in their expectations around the purpose, timing and funding of retirement. The SunAmerica Retirement Re-Set Study, sponsored by SunAmerica Financial Group in collaboration with Age Wave, is based on a national opinion telephone survey conducted in April by Harris Interactive among 1,001 Americans age 55 and older. "While the recession clearly had a financial and emotional impact, it was very encouraging to see that three out of five Americans 55 and older have remained hopeful for the future," said Jay S. Wintrob, SunAmerica Financial Group president/CEO. "Americans are emerging from the experience with new knowledge, new discipline and have re-set their vision of an ideal retirement." Credit unions might need a re-set, too, of their retirement savings products and financial education. Americans are clearly interested in more financial help and from many sources, said the report. Before, during and after the recession, only about 50% of Americans felt financially informed. Today, 80% want education and advice on saving and investing for retirement at their workplace and 92% feel that financial management should be a standard part of a high school education. Key findings about today's pre-retirees and retirees:
* They have a new outlook, with 54% viewing retirement as a new chapter in life rather than a winding down. That compares with 38% holding a similar view a decade ago. * Retirement is being postponed. Pre-retirees now say they intend to delay retirement by five years--from 64 to 69--because of increasing longevity, the recession and financial need. * Retirement no longer means the end of work. Nearly two-thirds of those surveyed indicated they would like to remain productive and work some in retirement to stay active and involved. * Financial peace of mind is now six times more important than accumulating wealth, with 82% of respondents naming it their key financial goal. * Unexpected multigenerational family assistance is the new retirement wild card. Pre-retirees must balance their retirement plans with the possibility supporting aging relatives, adult children, grandchildren and siblings. Nearly half of those surveyed expect to provide this support, and 70% believe their adult children will need financial assistance.
Many of those surveyed felt the negative impact of the recession. One-third said their financial assets still have not recovered to pre-recession levels and nearly half (46%) indicated their home is worth less now than before the recession. Today's retirement mindset re-set is defined by:
* A more flexible balance of work and leisure; * A re-setting of values and obligations, with better appreciation for quality family/friend relationships with friends while 96% said it is important to protect themselves and their families against financial uncertainties. "The financial services industry will be called upon to provide new solutions in retirement planning as people are concerned about a need to plan financially not only for parents, but also adult children, grandchildren, siblings and in-laws," said Wintrob. * Re-setting long life expectations. Of those surveyed, 67% said they want to live to 100, remain productive, establish deep relationships, witness new discoveries and experience years of leisure. However, their concerns include health problems, being a burden to family and running out of money. Also, the study found that Americans may not have as many years to save for retirement as they expect. Nearly half of today's retirees retired earlier than planned; 41% did so because of unexpected health problems and 19% due to loss of employment. * Re-setting retirement for Boomers. The boomers likely will have less in entitlements, less money for retirement and less respect from younger generations. However, they likely will be more active and youthful, and have more opportunities to learn and grow than previous generations. * Re-setting financial strategies. Seventy-six percent agreed the last few years were a needed financial wake-up call; 84% today exercise more cautious investment strategies. Protecting assets is five times more important today than investing aggressively to make up for lost time. Retirees now want investments guaranteed not to lose value and investments that protect their income from market loss.
"This is a significant shift and a clear lesson resulting from the recession, with Americans now seeking the preservation of assets as a top investment goal," said Wintrob. "The appetite for risk has clearly diminished. As Americans approach and enter retirement over the next decade, their need for asset protection, risk management and lifetime income solutions will take on even greater significance."