Fear of Social Security Demise Prompts Rethinking Retirement Goals, Survey Shows

CHARLOTTE, N.C. – While many consumers continue to express a great deal of uncertainty and worry about how well they are preparing for retirement, concern over Social Security has led to additional planning, saving and investing for retirement, according to a new Wachovia survey. Wachovia's annual Retirement Fitness Survey revealed that more than 80% of consumers said Social Security will be important to their own retirement well- being, yet nearly half are not confident that it will be available to them when they retire. As a result, 51% of consumers say they are making changes to how they prepare for retirement, the survey showed. Those changes include increasing their retirement savings in 401(k) plans and IRAs, planning more precisely, investing in alternate investments like real estate and working with a professional advisor. "People are realizing more and more that they have to take their retirement well-being into their own hands," said Bob Reid, president of Wachovia's Retirement and Investment Products Group, adding that 18% of consumers have lowered their lifestyle expectations in retirement. "The headlines around Social Security issues and pension cutbacks have caused more individuals to look in the mirror and consider their own retirement situations." Wachovia surveyed 21,000 consumers, ages 35-64 with household income or household investable assets greater than $75,000. More than half of consumers expressed uncertainty about their retirement (58%); worry (55%); or fear of making a mistake (50%) when preparing for retirement. Forty-three percent reported feeling overwhelmed, saying there are too many choices of where and how to invest, the market requires constant monitoring or they can't afford to save. Women, on average, were more likely to express one of these emotions, the survey revealed. "People are still very concerned about where they are in the planning cycle, especially considering the fact that they must plan and save for longer years in retirement," Reid said. "Increased longevity, combined with concerns over retirement savings, have created a new retirement reality for many people." Consumers were asked in the survey to provide tips to help others get in better retirement shape. Their top responses included talking to an advisor (16% of respondents); setting up automatic deductions or direct deposits into accounts (12%); depositing small amounts of money every month (12%); contributing to an IRA 0r 401(k) (11%); and budgeting and tracking expenses to find money to save (8%). Four retirement fitness categories were developed based on results from the survey. The fitness categories include: * At the starting line (31%). Consumers in this group are concerned about saving for retirement and may not be doing enough to prepare. More than the other groups, they feel uncertainty, worry and fear. * Looking fit (9%). Consumers in this group are concerned about saving for retirement but they appear to be on the right track. Their main concern is feeling overwhelmed with too many choices of where and how to invest. * Fitness evaluation may be useful (29% of respondents). Consumers in this group are not as prepared for retirement as some of the other groups, but they also are not as concerned. * Peak performer (31%). Consumers in this group are not as concerned about their retirement savings and appear to be on the right track. More than the other groups, they feel confident, hopeful and involved. -msamaad@cutimes.com