PITTSBURGH -- Retirees are worried that they'll outlive their money, a survey conducted for PNC Bank finds. Some 52% have withdrawn funds from retirement savings without a strategy in place, and 53% are concerned about running out.
Of those drawing down from their investments, 59% say the money is to cover expenses, according to PNC's semi-annual Perspectives of Retirement survey.
Retirees are more likely to withdraw money as they age (61% of 65- to 75-year-olds), but nearly 40% of young retirees (64 or younger) are already drawing down from savings. Almost two-thirds (63%) are concerned that Social Security or pensions will not suffice to cover expenses and needs in retirement, according to the telephone survey conducted in February and March.
"Most retirees don't have a plan for drawing down savings and that is a concern," said Joseph Jennings, senior vice president of wealth management at PNC. "Using savings to cover expenses indicates that retirees may not have a retirement income strategy in place and are putting themselves at greater risk of outliving their funds."
Fully 35% of respondents say the amount of money they use in retirement is about what they expected, but 31% had no specific expectations. The remainder are split evenly between those spending more and those spending less.
According to the survey, retirees concerned about running out of money have made efforts to control their expenses, budget more tightly and are taking various actions to reduce costs or raise income, among other actions.
The 53% who fear running out of money report the following:
- Two-thirds have changed the way they manage their money; 59% have reduced expenses and 41% budget more carefully.
- Those concerned are more likely to say they get a higher percentage of retirement income from savings or investments (an average of 35% versus 24%).
- The equity in their home is more likely to be important to their retirement plans; however, they are more reluctant to rely on the equity.
- They have significantly fewer assets. On average, total investable assets are $225,000, compared with average assets of $411,000 among those not concerned.
- The survey also found that retirees continue to rely heavily on Social Security. Fully 77% receive Social Security while 66% have a pension and 50% use money from savings and investments.
Published by The Business Journal, Youngstown, Ohio.
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