Study Found That More Than a Quarter Spend 10 Percent or More of Savings Annually

Despite facing "golden years" that could last two decades or longer, more than a quarter - 28 percent - of retirees surveyed in Wachovia's fourth annual Retirement Survey report withdrawing 10 percent or more of their retirement savings annually to pay for expenses. People who report this withdrawal rate have an average of $375,000 in savings. Only 38 percent say they withdraw "5 percent or less" of their savings. About half - 47 percent - say they have a written withdrawal strategy, and only 28 percent report having a written budget for spending their savings.

"When you retire, you have to make your savings last until the end of your life, and the way to do this is to create a proactive plan for the money you've earned," said Lynne Ford, director of Wachovia's Retail Retirement Group. "You can't spend as large a chunk of your savings annually as we're seeing in this data."

Richard Day Research (RDR) of Evanston, Ill., conducted 2,100 online interviews for Wachovia with respondents between the ages of 55 and 70 and with household assets of $75,000 or more, excluding the value of real estate holdings.

The study also found that the majority of respondents report taking Social Security at age 62. Another 17 percent report taking Social Security benefits at age 65. Only nine percent report delaying Social Security benefits past age 65.

When asked to identify their "greatest concerns" in retirement, respondents cited deteriorating health, unexpected illness and the rising cost of healthcare as the top three.

Optimism Prevails in Retirement

In spite of little planning, 84 percent of the retirees surveyed characterize themselves as "not distressed" in relation to managing their finances in retirement. Among younger retirees -- those between the ages of 55 and 59 with less than $250,000 in assets -- 75 percent describe themselves as "not distressed."

Professor Thomas Gilovich, chairperson of the Psychology Department at Cornell University reviewed the study and said, "Many things conspire to make recent retirees content with their financial prospects for their 'golden years.' There is a general human tendency to discount the future and focus on the here and now, especially if the future may involve physical decline or isolation. As people age, they become very good at looking on the bright side and derive satisfaction with what comes one's way. Unfortunately, the early retirement years often are a time for unwarranted and potentially deleterious optimism."

Gilovich is the author of the book Why Smart People Make Big Money Mistakes. He reviewed the results of the study but is neither a sponsor of the study nor is affiliated with Wachovia.

The potential to outspend retirement savings does not appear to worry respondents, as 91 percent say they feel "confident" or "very confident" that they have enough savings to last in retirement. A slight majority, 52 percent, say life in retirement is "better than expected" and 37 percent say it is about "as expected."

When respondents were asked whether "saving for retirement or managing retirement savings" was more difficult, 61 percent said saving for retirement and 39 percent said managing their retirement savings.

Anxiety Appears to Lessen Significantly in Retirement

The study compared the "emotional barriers" reported by those in retirement and those in pre-retirement and found significant differences.

  Emotion                        Non-Retired              Retired

  -- Feel hopeful (often)        31 percent               48 percent
  -- Feel confident (often)      29 percent               55 percent
  -- Feel worried                50 percent               31 percent
  -- Worry about investing
      mistakes                   43 percent               28 percent
  -- Frightened to entrust
      savings in stock market    46 percent               42 percent
  -- Feel "very confident"
      will have enough  money    16 percent               40 percent

To help people understand how to prepare for and live in retirement, Wachovia has developed an age-based approach to guide them through retirement's different stages. Visit the Wachovia Retirement Center online at http://www.wachovia.com/personal/page/0,,6938,00.html

For those close to or in retirement, Wachovia has developed key assessment tools to help them think about what they need.

Retirement Readiness Assessment http://retirementstrategy.mworld.com/retirement/readiness/assessment.asp

Retirement income needs estimator http://retirementstrategy.mworld.com/retirement/estimatingneeds/calculator.asp

Retirement Spending Plan Worksheet http://www.wachovia.com/personal/page/0,,6938,00.html.

Consumers can also call Wachovia's Retirement Resource Center at 866-588- 9606 Monday through Friday from 8:00 a.m. to 8:00 p.m. Eastern time.

Wachovia Corporation (NYSE:WB) is one of the nation's largest diversified financial services companies, with assets of $782.9 billion and market capitalization of $75.3 billion at December 31, 2007. Wachovia provides a broad range of retail banking and brokerage, asset and wealth management, and corporate and investment banking products and services to customers through 3,400 retail financial centers in 21 states from Connecticut to Florida and west to Texas and California, and nationwide retail brokerage, mortgage lending and auto finance businesses. Globally, clients are served in selected corporate and institutional sectors and through more than 40 international offices. Our retail brokerage operations under the Wachovia Securities brand name manage more than $1.2 trillion in client assets through 14,600 registered representatives in 1,500 offices nationwide. Online banking is available at wachovia.com; online brokerage products and services at wachoviasec.com; and investment products and services at evergreeninvestments.com.

Source: Wachovia

Web site: http://www.wachovia.com/