Many Americans are starting to worry that their retirement savings and other income sources won’t sustain them through their lifetimes. The current trend is attributable to the aftermath of the pandemic and the rumblings of an impending economic catastrophe in the United States. According to the Alliance for Lifetime Income and CANNEX’s third Protected Retirement Income and Planning Study, 48% believe their retirement assets and sources of income will last their entire lives, a 13% decrease from the previous year. However, 74% of annuity holders anticipate their savings and income will last their lifetime, compared to 43% without an annuity.
- Almost two-thirds of consumers worry about their finances several times a month or more; one-quarter worry about their finances daily.
- In retirement, only 35% of consumers expect to have enough money to fulfill their “wants.”
- Nearly a third of people who haven’t yet retired think they will have to retire early for reasons they can’t change.
The survey showed a significant lack of financial planning for the future. Despite mounting economic concerns, nearly one-quarter of consumers have no financial plan. Another quarter (28%) have an overall goal but no financial plan to get there. Customers aged 45 to 75 who are not retired are 50% more likely to save less than 10% of their annual income for retirement. Only three out of ten people who are not yet retired and advised by a financial expert have a strategy if they retire early. In this difficult economic environment, consumers’ strong need for protection is why the Alliance is persistent in helping individuals understand how to secure their hard-earned money. Unsurprisingly, consumers are putting pressure on their financial advisors to discover strategies to preserve their investments. Unfortunately, the research demonstrates that many financial experts fall short of consumers’ expectations and desires. Approximately 51% working with a financial advisor stated their advisor received an “A” rating for their responsiveness to their needs. Many customers believe that holistic help is a “must do” for financial advisors rather than a “can do.” Almost half of the customers believe financial advisors are responsible for giving their clients guaranteed lifelong income plans. About 42% of clients working with a financial advisor would contemplate leaving if they weren’t presented with all their choices for producing income in retirement. In this most recent poll, investors regarded income protection as more important than financial professionals. Investors expect to know the full range of possible solutions and strategies given the uncertainties around when and how retirement will change over time. With the assistance of their financial advisor, this would enable them to make an informed decision. New Research Paper Backs Up Study Findings The survey results align with a study published today by the Alliance’s Retirement Income Institute, which concluded that self-directed investors underperform those with professional investment management in challenging economic times. The paper examined the trading activity of 730,533 investors in 2020, a year of extreme market volatility caused by the COVID pandemic. According to the study, individuals who utilized any professionally managed portfolio solution were considerably less likely to trade in 2020 than self-directed participants. Older participants made the most significant changes among those who self-directed their accounts and traded in 2020. These participants were also considerably less likely to use a professionally managed portfolio option, implying that professional investment management is not provided to those who may benefit the most. A recent Alliance survey found that 73% of customers who work with financial professionals think their retirement savings and income streams will last them for the rest of their lives. In comparison, only 36% of customers who do not work with financial professionals think the same. Also, the survey found that the likelihood that a customer would have a pension or an annuity increased by more than double once they began working with a financial professional. Note for Financial Professionals Are you a financial professional who wants to learn more about how annuities may protect retirement portfolios and provide their customers with peace of mind during uncertain times? Then visit the Alliance’s dedicated resource center at www.resources.protectedincome.org.
Contact Information:
Email: [email protected]
Phone: 2624906519
Bio:
30 + years as a Financial Planner. Securities (Series 1,7, and 65) and Insurance Licensed. Retirement Planning including the actual planning of where your income will come from as well as a discussion of products to get you there. The market has been volatile since Covid broke out and many [people are not comfortable with this. If you are retired we will look at your total income and tax situation. If you are still working we have some more time to plan.
