Survey: MetLife Reports that Pre-Retirees Overestimate Retirement Moneys and Underestimate Retirement Length and Needs

According to research conducted by MetLife, 69% of pre-retirees overestimate how much they can draw down from their savings, with 43% saying they believe they can withdraw 10% or more each year while still preserving their principal, even though most retirement experts suggest a withdrawal rate of no more than 4% annually. In addition, 60% underestimate life expectancy and 49% underestimate the amount of pre-retirement
income they’ll need once they retire.

These results are reported in MetLife's 2008 Retirement Income IQ Test, released five years after its MetLife’s first Retirement Income IQ Test. Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute said that “While we would have liked to have seen more dramatic increases in the scores, directionally
Americans are improving their retirement income IQs."

"Yet, there are still far too many misconceptions about retirement income issues," added Timmermann. "Most concerning is the fact that so many pre-retirees overestimate how much they can spend down from their retirement savings annually. This statistic should serve as a wake-up call for pre-retirees and advisors alike."

Source: Press Release (June 25, 2008)