The Ideal Retirement? Survey Says …
Regardless of your age, you may know the popular game show, Family Feud. The original game airs in syndication and has regained popularity through current programming but the premise remains the same: Two families compete to name the most popular responses to survey questions in order to win cash and prizes. After the competing guesses are recorded, the host introduces the correct response by saying, “Survey says…”
A Senior Living Community provider recently released a survey of 2,000 Americans on the subject of how to define the “ideal retirement.” The answers from the national survey are interesting, even though they might contrast significantly with your responses.
Q: What is the right age to retire?
Survey says: Age 60. The answers varied based on the ages of those responding. Boomers answered with an average age of 64, while Millennials answered with an average age of 56. Maintaining lifestyle in a retirement starting at age 56 is a considerably greater financial challenge than starting at 64.
Q: More than 1 in 5 Americans desire to retire and live abroad. What is their top choice for a country to live in?
Survey says: Italy. Apparently, the draw of the Tuscan wine country is powerful. Those who pursue this course learn that the legal and paperwork requirements for Americans to live abroad can be challenging and require planning.
Q: Name the top 5 cities Americans prefer as a retirement location.
Survey says: (This might be surprising, but in order:) Miami, San Diego, Denver, New York and Orlando.
We know from much experience with this question that these particular cities are not on the list for many of our Linscomb & Williams clients. Whatever your personal leanings, however, retirement location is an important variable in your financial plan. Miami is 24 percent more expensive than Houston for example. San Diego is 41 percent higher, Denver 27 percent higher and New York is double. Only Orlando is reasonably close, but is still about 7 percent more expensive. Clearly, when planning the ideal retirement, where you intend to retire can have as much or more financial significance than when you desire to retire.
Q: How much in savings would be ideal by the time you retire? And how much do you realistically expect to have?
Survey says: To supplement Social Security and pensions, an ideal savings target would be $610,000. Unfortunately, the second half of the question on expected savings leaves a big gap: $276,000. This is less than half of what would be desirable.
In an unrelated survey conducted for the Certified Financial Planner Board of Standards, Inc. (CFP Board) by Heart + Mind Strategies of 1,000 voters on election day 2018, there were a couple of important insights which bear upon this last question.
- 60 percent of the respondents indicate they expect to work with an advisor for planning their retirement needs.
- However, 23 percent intend to wait until just three to five years before retirement to engage a professional financial planner.
- 82 percent want someone who can provide a comprehensive plan that takes their holistic financial situation into consideration.
- 79 percent believe their financial advisor should always work in their best interest (the “fiduciary” business model).
In our nearly 50 years of helping clients plan their own “ideal retirement,” we think there are several key elements that transcend the various visions of what might be ideal:
- If you don’t have a well-conceived plan for your ideal retirement, the best time to start working on it is today. Unless you are willing to do considerable homework on your own, seek the help of a qualified professional financial planner sooner rather than later.
- Choose a planner who is well experienced and qualified. Credentials can be important indicators. Look for the key 4: CFP® certification, CPA, Chartered Financial Analyst® credential and/or JD (Juris Doctor).
- Choose a planner who commits in writing to always interact with you as a fiduciary, with a legal obligation to work in your best interest.