This is just one finding from a study launched by Sun Life Financial of Canada which highlights that many will fail to achieve their annual target level in retirement.
The new report, Sense Check at 60, identified that 62% of mass affluent and high net worth (HNW) retirees expect an annual income of £30,000 to enjoy a fulfilling retirement, yet 40% have less than £300K saved, whilst one in three (34%) have ‘only' amassed a retirement fund of between £100-£200K.
In reality, a retirement fund of £600,000 is required to support this level of annual income over a 20 year period.
Sun Life Financial of Canada's report, which is based on qualitative and quantitative research with over 1,000 consumers, who each have a minimum pension fund of £100,000, reveals how well prepared in essence this group regards itself, yet the income gap and reality check many will face as they reach retirement. It also examines five key retirement risks more relevant to this group than any, and identifies strategies to navigate these risks successfully.
The findings provide a stark wake up call to both the industry, and mass affluent or HNW consumers approaching retirement, to ensure their funds are efficiently managed in terms of generating income, providing guarantees and protecting against inflation.
Commenting on the report, Mark Stopard, head of marketing at Sun Life Financial of Canada said: "The Sense Check at 60 study is a major step forward for the industry in terms of identifying a demographic which until now, has had comparatively little attention.
“!Whilst this group of savers have amassed very respectable size funds, there is still a reality gap in terms of retirement income levels they expect and are likely to achieve.
"At first glance, their future looks secure, with little need for assistance, however the Government's proposals to abolish compulsory annuitisation at age 75 means tomorrow's retirees have far greater control over their retirement assets than any other generation, and the main beneficiaries of this change will be the mass affluent."
