The Retirement Adequacy Question; Confusion to Clarity

The Retirement Adequacy Question; Confusion to Clarity

You might think that a straightforward question about the adequacy of funding for retirement would derive a clear-cut answer. The truth is, just a cursory search of recent studies on this topic have huge discrepancies in their findings.

Depending on how the question is framed, from 29%- 71% of those questioned in research over the past few years affirm they are adequately prepared for retirement. Of course, these responses are self-selected and many individuals believe (falsely) that their living expenses in retirement will be a fraction of their pre-retirement spending. Thus, their definition of “adequately prepared” may be misguided.

One of the more interesting recent studies was conducted by Harris Poll for TD Ameritrade in late 2019.  The audience for this survey was equally divided among those in their 40s, 50s, 60s and 70s.

The graph below from the Harris/TD Ameritrade Survey highlights how certain career (human capital) and family events can necessitate a change in the strategy/direction of retirement planning.

TD Survey
Source: The Harris Poll on behalf of TD Ameritrade

The events that received the highest percentage of responses indicating a need to reassess are mostly those that can’t be controlled. Of particular interest are the middle categories of Health Events and Market Events. The percentage of those who respond affirmatively to these questions is roughly constant across the four age groups. Incredibly telling and curious.

The Harris/TD Ameritrade Survey also reveals a stunningly negative statistic. 46% of those in their 40s have already withdrawn from retirement accounts. This is symptomatic of poor planning for “things that go bump in the night” and demonstrates deficient overall liquidity within this cohort.

The 2018 Planning & Progress Study (also conducted by Harris), found that 78% of the respondents were “extremely or somewhat” concerned about affording a comfortable retirement. 66% said that there was some likelihood of outliving retirement savings. This is a question that few individuals want to address head on but it’s very important.


The overarching commonality among most of the research is just how few individuals are really prepared when a realistic version of lifetime consumption, including inflation is considered.

However, there have been several surveys lately that purport to send the errant message that “all is well” even if reality outlines a far different conclusion.

66% of those in the 50-59 age group in the Harris/TD Ameritrade Survey indicate that they plan to reduce their current living expenses in retirement. Our observed data from over three decades of working with clients in the” run-up” phase prior to retirement paints a far different picture. Assuming good health, many families typically spend as much or more in the beginning years of retirement as they did previously.


My concern is that many individuals might take false comfort in some of the survey findings just at the time that they should be making course corrections. Our anecdotal evidence suggest that fewer than 20% of high income individuals in their 50’s are on track. The actual percentage could be even less depending on how broadly you frame the implicit uncertainty of lifetime consumption.

Even if you save/invest enough and focus on the inputs that you can control, you can’t control one major factor…how long you will live. We continuously remind clients that retirement planning involves a lot more than numbers, it’s not just a simple math equation.

Life is confusing at times and engaging in a deliberate, ongoing process of planning for your future is the only way to produce an element of clarity. Start there. Ready for a real conversation?