American pre-retirees are not taking retirement planning seriously, according to a LIMRA study.

Twenty-five percent of the 33 million U.S. pre-retirees surveyed say they felt “very prepared” for retirement, down from 30% of those surveyed in 2010.

The study considered the pre-retiree population as people between the age of 55 and 70 who have not yet retired. Thirty percent of males said they were very prepared, compared to 23% of females. Also, people with financial advisers seem to be in a better position with 39% of the very prepared already having advisors versus 20% who did not. 

Fewer households have more than $100,000 in financial assets for retirement, compared to earlier years, the study shows. Only 38% of the pre-retirees have more than $100,000 of financial assets with the majority being below the $100,000 mark.

“Pre-retirees’ circumstances have not improved over the past several years with fewer pre-retiree households having $100,000 or more in financial assets (45% in 2007 to 38% in 2010),” says Matthew Drinkwater, an associate managing director of retirement research at LIMRA. “Even more troubling, our survey revealed that pre-retirees have unrealistic expectations regarding how much income they will need and their ability to work in retirement.”

Pre-retirees believe they will need less than 67% of their current income during retirement compared to the 70% to 80% level, which is generally recommended. They also think they will need to withdraw around 9% of their assets annually to pay basic and discretionary expenses.

Working in retirement is what most of the pre-retirees are considering. However, previous research by LIMRA shows that less than a third of current retirees have jobs. “It is important for pre-retirees to recognize that they might be forced to retire before they planned or be unable to work in retirement — diminishing their accumulation years and requiring them to stretch their savings for longer periods than planned,” Drinkwater says.

Madhura Karnik writes for On Wall Street, a SourceMedia publication.