Retirement ‘Chasers’ Worry it May Be Too Late

By Ted Godbout • August 06, 2018 • 0 Comments
While the vast majority of active retirement savers agree that accumulating enough savings is an important factor in their ability to retire comfortably, a significant subset is worried they’re already too far behind to reach their goals, a new study finds.

According to Allianz Life’s Chasing Retirement Study, 85% of these so-called “chasers” feel they have fallen behind where they should be in saving for retirement, compared to just 4% of non-chasers. Moreover, the same percentage worry it will be too late for them to have a comfortable retirement if they don’t increase their savings soon, compared to 2% for non-chasers.

Yet, more than half (54%) say they have too many other expenses right now, and one in five say they are saving for other financial goals. As a result, two-thirds of this cohort fear they will run out of money in retirement, and more than 6 in 10 believe they will need to keep working instead of retiring.

For purposes of the study, “chasers” are defined as those ages 45-65 who are saving but have either fallen behind on where they should be, wish they could accumulate savings faster, or worry that if they don’t increase savings soon it will be too late to have a comfortable retirement.

Chasers were also found to own fewer financial products. Only 53% of these respondents have an IRA, and even fewer hold individual stocks (35%), mutual funds (35%), a pension (37%) or an annuity (14%). By contrast, 70% of “confident savers” own an IRA, while more also own individual stocks (56%), mutual funds (51%), have a pension (53%) or own an annuity (28%).

The vast majority of chasers (98%), who make up half of the study’s total respondents, wish there was a way to accumulate funds faster to make up for lost time, versus 41% for non-chasers. But at the same time, nearly two-thirds (63%) say they can’t take the risk of investing in high risk/high reward financial products.

As a result, chasers gravitate toward protection as part of their growth options, the study notes. More than 8 in 10 (84%) say they are interested in a financial product that offers growth potential with some protection from loss and 71% are willing to trade off some upside growth potential to have some protection from losses.

“While it’s a positive that they are actively saving for retirement, the level of anxiety is concerning and many are simply not aware of potential solutions to help them catch up,” explains Paul Kelash, Vice President of Consumer Insights for Allianz Life.

In fact, only 39% of chasers are currently working with a financial professional, compared to over half (53%) of their more confident counterparts, the findings show. “Working with a financial professional can help chasers understand how they could take on more risk, yet still have protection in their portfolio,” explains Paul Kelash, Vice President of Consumer Insights for Allianz Life.

The study is based on an online survey conducted in April 2018 with a nationally representative sample of 1,007 respondents ages 45-65 with a minimum household income of $100,000 if married or $75,000 if single, who own at least one financial product, and have some retirement savings.