SAN MATEO, Calif., May 01, 2018 (GLOBE NEWSWIRE) -- Each year, Franklin Templeton Investments conducts its Retirement Income Strategies and Expectations (RISE) survey of investors, which aims to arm clients with a heightened level of insight into what’s driving individuals’ attitudes and behavior around planning for and living in retirement. Now in its 7th year, the survey continues to examine a variety of perceptions and concerns about retirement savings strategies, and how these differ by generation and other demographic factors. 

Overall, Americans are most concerned about paying for medical and pharmaceutical expenses in retirement (31 percent), followed by paying off debt (18 percent) and funding assisted living care (15 percent), according to this year’s survey. Digging deeper into retirement income concerns and strategies across generations, views and specific needs begin to diverge.

“This year’s RISE survey findings really highlight how individualized a person’s retirement savings plan needs to be,” said Michael Doshier, vice president of Retirement Marketing at Franklin Templeton Investments. “The differences between generations, even among those of the same gender, show that comprehensive retirement planning requires a holistic view that incorporates demographic differences and short-term risk tolerances as well as long-term goals.”

Gen X women are the most concerned about retirement income
Gen X women, particularly younger Gen X women (those ages 38-45), express the most concern about managing their retirement income to meet their retirement expenses (62 percent), compared to 45 percent of older Gen X women (ages 46-53).

Despite these concerns, two-thirds (67 percent) of Gen X women do not have a strategy to generate income for a retirement that could last 30 years or more, compared to 55 percent of Millennial women and 51 percent of Baby Boomer women who say they lack such a strategy.

In fact, a majority of Gen X and Millennial women noted that they would prefer to keep working and retire later if they were unable to retire as planned due to insufficient income (58 percent and 60 percent, respectively). Meanwhile, only 42 percent of their female Baby Boomer counterparts indicated they would delay retirement in these circumstances.

Millennial men are the most confident in their retirement income strategy
Most Millennial men (61 percent) express more concern about shorter-term market volatility than they do about not achieving their long-term goals. Comparatively, only 40 percent of Gen X men and 50 percent of Baby Boomer men express more concern around this shorter-term market volatility vs. achieving their long-term goals.

Although focused on market volatility, nearly 30 percent of younger Millennial men (those ages 20-28) would consider a higher risk growth-oriented investment strategy should they be unable to retire as planned, while only 15 percent of Gen X men and seven percent of male Baby Boomers indicated that they would consider this strategy.

Millennial men who currently work with a financial advisor or have in the past are also more likely to have developed a written retirement income plan with their advisor (67 percent), compared to their Gen X (43 percent) and Baby Boomer (56 percent) counterparts. Despite this, Millennial men, regardless of whether they have an advisor, expressed the most concern (60 percent) about managing their retirement income in order to meet their expenses, followed by 45 percent of Gen X and 40 percent of Baby Boomer males who say the same.

Across generations, Americans are most concerned about medical expenses
While medical expenses are a major concern, nearly half of respondents (46 percent) expressed that they don’t know how they’re going to pay for these expenses in retirement. That said, 76 percent of people who aren’t retired yet, aren’t using or don’t have access to a Health Savings Account (HSA) to save for their medical expenses.

“When determining your retirement savings strategy, healthcare planning should be a major part as it can directly impact your retirement,” said Kevin Murphy, senior vice president, national retirement plan strategist for Franklin Templeton’s Defined Contribution Division – US. “Health Savings Accounts are often thought of as IRAs or 401(k) plans for medical expenses, and they can complement long-term retirement savings strategies. While there are a lot of options, this is where financial advisors can be helpful to determine the best strategy for each individual.”

Additional RISE Survey Highlights:

  • One-third of respondents (33 percent) are concerned about running out of money in retirement, outpacing concerns about health issues (26 percent) and having an inactive lifestyle (11 percent).
  • Social Security will be the top source of retirement income for nearly half of all respondents (49 percent), followed by a current or prior workplace retirement plan (41 percent) and a checking and savings account (27 percent). 
  • One-third (33 percent) of workers state that not having enough saved would be the most likely reason their retirement could be delayed, compared to only three percent of current retirees who say their retirement was delayed for this reason.
  • The majority of Americans (62 percent) consider a financial advisor important to retirement planning, however, less than one-third (29 percent) of those surveyed currently work with a financial advisor.

Franklin Templeton Investments is a leader in providing retirement income insights and resources to financial advisors and plan sponsors as they help individuals prepare for their post-working years. Additional survey and retirement planning resources can be found on Franklin Templeton’s website.

Methodology
The 2018 Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey was conducted online among a sample of 2,002 adults comprising 1,002 men and 1,000 women 18 years of age or older. The survey was administered between January 17 and 25, 2018, by ORC International’s Online CARAVAN®, which is not affiliated with Franklin Templeton Investments. Data is weighted to gender, age, geographic region, education and race. The custom-designed weighting program assigns a weighting factor to the data based on current population statistics from the U.S. Census Bureau Generational groups are defined as follows:  Millennials (ages 20-37), Gen X (ages 38-53), Baby Boomers (ages 54-72), and the Silent Generation (ages 73-91).

About Franklin Templeton Investments
Franklin Templeton Distributors, Inc. (FTDI), is a wholly owned subsidiary of Franklin Resources, Inc. (NYSE:BEN), a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management to retail, institutional and sovereign wealth clients in over 170 countries. Through specialized teams, the company has expertise across all asset classes—including equity, fixed income, alternative and custom solutions. The company’s more than 650 investment professionals are supported by its integrated, worldwide team of risk management professionals and global trading desk network. With offices in over 30 countries, the California-based company has 70 years of investment experience and approximately $737 billion in assets under management as of March 31, 2018. For more information, please visit franklintempleton.com.

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From: Franklin Templeton Investments
Corporate Communications: Rebecca Radosevich, (212) 632-3207, rebecca.radosevich@franklintempleton.com
Prosek Partners: Cary Ruterman, (857) 302-3712, cruterman@prosek.com