Workers risk outliving retirement funds, study finds

Jun. 29, 2008 (McClatchy-Tribune Regional News delivered by Newstex) -- Most workers approaching retirement drastically overestimate the amount of money they will be able to withdraw annually from their savings once they stop working, putting them at risk of outliving their assets, according to a national poll by MetLife Inc. (NYSE:MET PRA) (NYSE:MET PRB) (NYSE:MEU) (NYSE:MLG) (NYSE:MET) The poll, intended to gauge consumers' knowledge about retirement savings, found that nearly 70 percent of pre-retirees believe they will be able to withdraw more money per year than they will be able to, or should.

MetLife conducted the poll in April, with 1,216 adults ages 56 to 65 participating.

About 43 percent of workers think they can withdraw 10 percent or more each year from their retirement savings while still managing to preserve their principal, but most experts recommend withdrawing no more than 4 percent annually.

MetLife's 2008 Retirement Income IQ Test also found that 60 percent of Americans underestimate their life expectancy and 49 percent underestimate the amount of pre-retirement income they will need once they leave the work force.

The poll was the second time MetLife studied people's retirement knowledge. The results showed improvement over the first poll, done five years ago, but demonstrate there are still gaps in workers' knowledge, said Sandra Timmermann, director of the MetLife Mature Market Institute.

"There are still far too many misconceptions about retirement income issues," she said in a written statement. "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 advisers alike."

Newstex ID: KRTB-0141-26315195