How financially prepared are you for retirement?
If you are still working, imagine that you have already retired and are posed this question: "Overall, financially, do you think that you prepared adequately for a comfortable retirement?" How do you think you would answer?
Among actual retirees in the U.S. who answered this question as part of HSBC's latest global report, 15 percent said they prepared more than adequately and 39 percent said they prepared about adequately. Meanwhile, 35 percent answered, "not adequately," and 9 percent said "not at all."
I tend to have a glass-half-full perspective, and perceive this as more good news than bad. After all, more than half of retirees at least adequately prepared for retirement. Meanwhile, 44 percent did not, and of those, only 37 percent fully understood their lack of preparation prior to retiring, according to the HSBC report called "Life after work?"
In another new global survey from Natixis Global Asset Management, most Americans (89 percent) say they expect that their current investment approach will provide steady income in retirement. But if they run short of money, 40 percent say their backup plan is to rely on family for support. Another 38 percent will look for help from the government.
This doesn't seem like good retirement planning to me.
What retirement can be like
I have some friends who have already retired, and while as a general rule I don't pry into their financial affairs, I have a good sense about how well they are managing. Earlier this year, Susan retired and her husband, Art, threw a surprise retirement party for her, which I of course attended. Within two months, they moved their stuff into storage and took off to live in Hawaii, where they are renting a studio apartment. Big enough for them, but too small for visitors. They plan to stay for two years and then, who knows?
In a phone conversation last week, I asked Susan if her life had changed appreciably since a year ago. I knew that it had but I wanted to hear her answer. A year ago as an auditor, she spent her time on the road traveling for business, working a lot of hours and was under constant pressure.
She replied that life is different now. She gets up every morning and takes a walk on the beach. She volunteers a couple of days a week. She and Art are members of a nearby museum and involved in cultural activities in the area -- "home" they call it. "I don't know how I ever fit work into my schedule," she says now. They're having the time of their lives, but they're not overextending themselves.
And I have a friend at the other end of the retirement spectrum. Sadly, Jeanette is having a tough time. She recently felt compelled to abandon her apartment with all her possessions in it because she imagined that games from smartphones and computers from adjacent apartments were infiltrating her space. Terrorized, she drove north to New Jersey, where she was hoping to meet up with family. She set up camp in a parking lot at some mall near Trenton over the past couple of months. Occasionally she sleeps in a motel, but otherwise her car is home base. No, she didn't prepare for retirement, but her situation is complicated by illness.
Our mutual friend Louise is a retired schoolteacher who still works part-time teaching English as a second language. She didn't sign up to teach this fall so she could go on a trip to Spain, where she'll visit family and friends. She enjoys retirement, but confessed to me that she misses the stimulation she gets from teaching, so she plans to sign up again when she returns from her trip.
In the HSBC survey, when retirees were asked about the best financial advice they'd ever received, a whopping 69 percent chose this answer: "Start saving at an early age."
If you know someone who's young enough to follow this advice, pass it on.
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Barbara Whelehan is a co-author of "Future Millionaires' Guidebook," an e-book by Bankrate editors and reporters. It is available at Amazon, Barnes & Noble, iBookstore and other e-book retailers.