Financial security weighs heavily on retirees

A group of women take a water aerobics class Thursday at Sun City's Prairie Lodge. New research shows that investment savings and financial security, rather than age, now determine when near-retirees feel ready to retire.
A group of women take a water aerobics class Thursday at Sun City's Prairie Lodge. New research shows that investment savings and financial security, rather than age, now determine when near-retirees feel ready to retire.

Kitty Nash worked through a financial checklist as part of her calculation to retire late last year from her vice president role at Home State Bank in Crystal Lake.

After 24 years at the bank, Nash, an Algonquin resident, envisioned her day-to-day lifestyle, from morning to night, and the ability to manage those everyday expenses without the comfort of a daily income.

“You have to do a real in-depth analysis of your life,” Nash said. “I don’t think anybody ever wants to do that. We just want to turn the key and write the check and be done. But in order to sleep at night once you do retire, you really have to analyze everything.”

Nash’s financial calculation was an effort to plan for a sustainable retirement in an uncertain future that has recent and near retirees, according to new surveys, uneasy about retirement costs and their financial security.

Maritz Research, a Missouri-based market research firm, found in a survey released in June that the financial tipping point for recent and near retirees was $500,000 in savings.

Respondents who had reached that point were more optimistic about their financial security, less concerned about having enough money in retirement and felt better prepared for increasing health care and cost-of-living costs. Maritz surveyed 1,000 people nationwide at or near retirement with at least $100,000 in savings.

The results underline the increasing importance financial security, rather than age, plays in a person’s retirement plan.

Maritz found that most respondents believe retirement is an outdated concept, with 37 percent of near retirees saying they will have to work during their retirement.

“I think there is a sense that retirement is not what it used to be,” said Rich Brose, a financial services expert at Maritz who helped perform the survey. “Folks have come to grips with ‘OK, I’m going to have to work a little bit; I’m going to delay retirement.’ ”

A similar survey from the Employees Benefit Research Institute released in March found that 69 percent of workers said they plan to work into retirement. The institute conducts the annual report, randomly surveying 1,000 workers ages 25 and older.

The institute concluded that Americans’ confidence in a financially comfortable retirement remained low in 2013, after years of decline.

But not all retirees need to reach the $500,000 tipping point to feel financially secure and comfortable about their retirement, said Terry Maryniw, owner of Maryniw Financial, a planning firm in Lake in the Hills that advises many clients on retirement.

An individual’s lifestyle and financial needs all can influence the amount of money needed to last through retirement. But Maryniw’s advisers generally stress to clients the importance of saving early and often, spending within a budget and making sound investments, Maryniw said.

“They have to be aware of what the costs of retirement are going to be and start taking action,” Maryniw said. “At age 60, it’s too late to be planning for 65.”

Retirement age outdated?

• According to Maritz Research, recent and near retirees with $500,000 in investment savings view their retirement much more positively than retirees with less than $500,000.

• 37 percent of near retirees said they will work during retirement and 36 percent said they would delay retirement all together.

• 67 percent of near retirees claim they feel optimistic about their financial security in retirement versus 79 percent of recent retirees.

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