The market drop in 2008 was a very unpleasant events for retirees, or near retirees. The strong market in 2009 was perhaps equally unexpected. Merrill Lynch Wealth Management did a survey of affluent retirees in early 2010 to find out how they were coping. The insights are important.
Surprisingly, given the opportunity to do it all again, roughly half (51%) of retired respondents indicated that they would have focused more on their “life goals” and less on “the numbers” and on hitting a specific nest egg dollar amount when planning for retirement, while the remaining respondents (49%) indicated that they would have focused more on “the numbers.”Retirees who wished they had focused more on their “life goals” indicated that they would have spent more time determining how they wanted to live in their retirement years (38%) and based their retirement income needs not just on a number that would sustain them but on one that would help them live their ideal lifestyle during these years (13%). Additionally, 8 percent would have created a plan to better support their philanthropic missions. Among those who indicated that they would have focused more on “the numbers,” 23 percent wished they had started working with a financial advisor earlier in life and 18 percent would have given up more luxuries in order to reach their retirement goals. Among all retired respondents, three out of 10 (31%) worked with a financial advisor when planning for retirement, though, in hindsight, more than half (55%) wished they had started doing so sooner.
I find it quite enlightening that among the group most focused on life goals, they really wished they had spent more time figuring out what they wanted to do in retirement and then saved enough to live their ideal lifestyle and not just enough to get by. Among the group focused on the numbers, a significant chunk wished they had started working with a financial advisor earlier-and for those already working with a financial advisor, a majority wished they had started working with an advisor sooner.
In short, most of the retirees wish they had saved more and started working with an advisor earlier. For advisors, the implications are clear: push clients to save more and to focus on retirement much earlier.
