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Consumers Are Retiring Earlier Than Planned And Underestimating Retirement Expenses, According To A Genworth Survey

RICHMOND, Va, Nov. 7, 2013 /PRNewswire/ -- Consumers have unrealistic expectations about when they will retire, how much money they will need in retirement and where that income will come from, according to The Future of Retirement Income, a survey released today by Genworth.

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"Unpredictable retirement dates, compounded by misperceptions about retirement expenses and the uncertain futures of traditional sources of retirement income may leave many retirees at risk for outliving their retirement savings if they don't prepare properly," said Eric Taylor, Vice President and National Sales Manager for Annuities at  Genworth.  "The findings underscore the need for flexible financial solutions that provide reliable retirement income, such as fixed annuities."

The survey findings highlight how:

Retirement Timing is Often Beyond Our Control 

The Genworth study reveals that while nearly three-fourths (73 percent) of pre-retirees are confident they will retire as planned, only 48 percent of actual retirees retired when they expected. Among the more than 1,300 people surveyed, including more than 700 retirees, 46 percent retired sooner than planned.

Although the primary reason was due to job loss (36 percent), health issues (17 percent) and family issues (12 percent), an additional 25 percent said they retired early because they just "didn't want to work anymore." 

Retirement Expenses Don't Add Up

Expectations about retirement expenses also don't match reality.  More than half (52 percent) of pre-retirees expected expenses to decrease in retirement, when in fact 65 percent of actual retirees found expenses stayed the same or even increased in retirement.

The vast majority (77 percent) of retirees found that their general living expenses increased in retirement.  More specifically, retirees experienced increases in healthcare costs (41 percent), real estate related expenses (26 percent) and money spent on dependents (18 percent).

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