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What Franklin Templeton's RISE Study Teaches Us

retirement income strategies and expectations survey ninth annual

Franklin Templeton's annual Retirement Income Strategies and Expectations Survey (RISE Survey) was recently released for 2020. This is the ninth year that the RISE Survey has been published.

The survey examines the concerns and attitudes of retirement savers. And it contains some very interesting data for retirement planners and savers alike.

In it, people of many generations share whether they think they are ready for retirement. The survey also covers what they are doing to accomplish their financial goals before they stop working.

As usual, this year's RISE Survey wasn't any different in the insights it drove home. Here's a roundup of some findings that might be helpful for your own retirement planning efforts.

Top Financial Stressors Across Generations

In the survey, three generations of American retirement savers chimed in: Baby Boomers, Gen Xers, and Millennials.

One of the first things that the RISE Survey revealed was the main drivers of financial stress for Millennials. Respondents reported that the majority of stress came from three main factors:

  • Debt
  • Ability to handle unforeseen expenses
  • Day-to-day living expenses


The survey went on to say that 28% of pre-retirees who felt that they were financially unprepared for retirement were behind in their savings. Why? They had put too much importance on debt reduction in their earlier years, according to the pre-retirees.

What Were Their Top Priorities?

The next major point was the wide range of financial priorities the respondents had. The major priorities they listed are broken down as follows:

  • Saving for retirement
  • Paying off debt
  • Having enough money in emergency savings to cover unexpected bills

This third major priority was a top driver of stress for respondents of all ages and levels of income. And when it came to financial priorities, the respondents were broken up into three age categories:

  • Millennials (aged 24 to 39)
  • Generation X (aged 40 to 55)
  • Baby Boomers (aged 56 to 74)


Saving for Retirement and Other Goals

Perhaps somewhat surprisingly, Generations Xers were the most concerned about saving for retirement. About 50 percent of them listed this as their highest priority. Just over 40 percent of Baby Boomers listed this as their highest priority, while just under 40 percent of Millennials did.

Just over 20 percent of Millennials said that saving for their kids' college educations was their highest priority. Meanwhile the percentages for both Generation Xers and Baby Boomers were much lower.

The numbers for saving for a home purchase or another major purchase or paying off secured debt were also closely in line with saving for retirement.

The numbers for paying off unsecured debt (i.e., credit cards, personal loans) were somewhat higher, with about 35% of Millennials making this a top priority. Generation Xers and Baby Boomers came in at about 30% and 25% respectively.

Confident in Retirement Income Planning Or Not?

The next subject that the survey covered was the sentiment towards having a retirement income plan.

  • 72% of respondents said that they were confident in knowing how much income they will need in order to cover their expenses
  • 45% expressed serious concern about their ability to manage their retirement income to meet their expenses.
  • 58% said that they had no plan of any kind to meet their living expenses during retirement.


When Did They Plan to Retire?

The next item that the survey revealed was that all target retirement dates are personal. Over a third of working Americans in their 60s said that they still worked because they wanted to. And 64% of pre-retirees say they would make work-related adjustments if they didn’t have enough saved.

However, more than a quarter of retirees retired due to circumstances beyond their control. Meanwhile, 29% of pre-retirees age 55-64 who plan to retire said Social Security eligibility is the main influencer of their target retirement date.

Did They Save Enough for Retirement?

The survey next covered the number of retirees who felt that they should have saved more for retirement during their working years. 56% said that they should have saved more, while 69% said that their monthly living expenses either stayed the same or increased.

Don't Forget About Retirement Income

Ultimately, the survey boils down to the fact that retirement savers need a sound plan to generate income for life. A financial advisor can be an invaluable resource here and can show you how to maximize your savings and stretch your dollars out as far as possible.

Advisors can also help you maximize your Social Security benefits. They can guide you and allocate your retirement portfolio so that it fits your risk tolerance, financial objectives, and personal timeline.

There was some unrest among the survey takers about retirement income. Three out of 10 current retirees (38%) are trying not to dip into savings, primarily driven by uncertainty.

49% of Americans said they were willing to pay for insurance that guarantees a stream of income for as long as they live. And a whopping 97% of those participating in an employer-sponsored retirement plan are looking for options that help turn savings into a stream of income in retirement.

What Can You Do Secure Your Retirement?

The survey ended with a few suggestions on how pre-retirees can help themselves to prepare for retirement.

1. Take care of your financial well-being early by finding and using resources that can help you maximize your retirement savings, manage debt, and improve your cash flow.

2. Personalize your financial plan so that it fits your personal circumstances and needs. Again, a financial advisor can help you do this by asking questions that will uncover your values and priorities.

This is a vitally important step to take if you want to have a secure retirement and enough income to last for the rest of your life.

3. Figure out how to recreate a paycheck after you stop working. A financial advisor can help you get a clear picture of your expenses after you retire and what you will need to do to fill in any income gaps.

Put Guaranteed Income Streams in Your Corner

Annuities can be invaluable tools for accomplishing this. They are the only type of instrument that can guarantee you an income stream that you can't outlive.

There are five primary types of annuities in the marketplace today. Here are a couple of popular ones for those who worry about losing money.

Fixed annuities pay a guaranteed rate of interest for a set period of time. Fixed index annuities earn interest that is tied to an underlying financial benchmark, such as the Standard & Poor's 500 Price Index.

You can earn more interest in a fixed index annuity than you might in a plain-vanilla fixed annuity. Both will guarantee protection of your money during market-down periods.

But in exchange for more interest-earning potential and principal protection in an indexed annuity, the insurance company limits your indexed annuity money's growth potential. Your financial professional can discuss these pros and cons, not to mention those of other retirement options, with you.

What Else Should We Take Away from RISE?

The bottom-line? The RISE Survey shows that a large segment of the American population isn't financially prepared to retire. If you don't want to be one of these statistics, it's good to start preparing now for your non-working years.

To meet their retirement goals, people might have to give up some luxuries that they may currently be enjoying. That might not be the best news to hear at first.

But, someday, you will be glad that you began now. A financial professional can help you create a plan for this and work toward it systematically. Are you looking for this sort of guidance in reaching your goals?

No sweat! For your convenience, many financial professionals are just a click away at SafeMoney.com. You can reach out to someone and connect with them about an initial appointment, at no obligation, to discuss your goals, concerns, and situation.

Use our dedicated "Find a Financial Professional" section to connect with someone directly. Should you need a personal referral, please feel free to drop us a line at 877.476.9723.

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