Most underestimate how much income they will need in their senior years, and are less likely to seek financial advice than average American
New York, NY – November 30, 2015 – Fewer than half (47 percent) of New York State residents are confident that they are saving enough money to last throughout their retirement, and women are far less confident than men in New York (37 percent vs. 58 percent), according to TIAA-CREF’s annual Advice Matters survey. Yet 52 percent of state residents say they have never sought professional financial advice– a slightly higher percentage than people nationwide (47 percent). TIAA-CREF conducted identical surveys in New York State and at a national level. The results of the national Advice Matters survey can be found here.
More than a third (36%) of New York residents who have not worked with a professional financial advisor say they don’t think they have enough money to do so. Overall, more than half (51 percent) of New York residents believe they should have $50,000 or more in savings in order to justify meeting with an advisor – compared to 45% of people nationwide.
“Everyone has something to gain from financial advice, because we all have something we’re working toward,” said Charlie O’Connor, Managing Director and head of TIAA-CREF’s Empire State Sector. “No matter where you are in your savings journey – whether it’s paying off student loans, purchasing a new home, or ensuring your loved ones are provided for, you don’t have to go it alone. And the sooner you engage an advisor and put a financial plan in place, the more likely you are to get on track to help achieve your goals.”
The survey found that New York respondents who have met with a financial advisor are significantly more confident in their retirement savings planning than those who have not done so (79 percent versus 52 percent). The findings also indicate that meeting with an advisor can spur individuals to take positive actions to strengthen their personal financial situation. New York residents who received professional financial advice reported they subsequently changed their asset allocation in their retirement plan (39 percent), increased the amount set aside in savings (31 percent), decreased spending (27 percent), or monitored their savings more frequently (30 percent).
Working with a financial advisor can also help New York State residents determine if they have an accurate target for retirement income, which is critical to ensuring they will be able to cover their expenses after they stop receiving a regular paycheck. New Yorkers who have discussed retirement with an advisor are much more likely to have “run the numbers” and calculated how much income they will need in retirement – 74 percent versus only 39 percent who have not met with an advisor. Eighty percent of those who have met with an advisor have discussed ways to turn their savings into monthly income upon retirement, and 47 percent have put these recommendations into action.
However, the survey indicates that many New Yorkers underestimate how much income they will need in their retirement years – placing these individuals at risk of outliving their savings. While most experts recommend that individuals target 70 percent to 100 percent of their pre-retirement income (after taxes) to maintain their standard of living in retirement, 51 percent of New Yorkers said they believe they will need less than 75 percent of their current income in retirement.
“Working with a financial advisor gives you a full and realistic picture of your finances – including what your life in retirement will look like, and what income you will need each month to live comfortably,” said O’Connor. “Once you have a clear vision, you can take positive steps to strengthen your financial foundation, such as increasing your savings or developing a plan for paying off debt. Consulting with an advisor gives you the knowledge and insights you need to take control of your finances – and your future.”
TIAA-CREF manages the assets of approximately 470,000 New York State residents and serves approximately 2,150 nonprofit, educational, research and health care institutions in the state1. TIAA-CREF has served clients in New York State for more than 97 years and has offices in Albany, Buffalo, Ithaca, Long Island, New York City, Rochester and Syracuse.
TIAA-CREF helps our participants plan for their retirement and other milestones by using a variety of resources and interactive tools. Additionally, we offer financial advice on our customer’s employer sponsored retirement plan, regardless of a participant’s income or savings level. Individuals can access advice online, by phone or face-to-face with one of nearly 900 consultants located across the country. TIAA-CREF also offers helpful information on key personal finance issues through its online Advice and Guidance Center and Woman2Woman online community.
The survey was conducted by KRC Research from August 3 to 10, 2015, via an online survey of 1,053 New York State adults age 18 and older. The survey was not conducted among TIAA-CREF participants, and the survey questions and responses did not reference or concern any TIAA-CREF product, service or client experience.
TIAA-CREF (www.tiaa.org) is a national financial services organization with $834 billion in assets under management (as of 09.30.15) and is a leading provider of retirement services in the academic, research, medical and cultural fields.