Financial professionals want to help their clients reach personal goals for happiness in retirement. As people’s life spans have gotten longer and the nature of work has changed, what people expect from their years outside the workforce has changed significantly. That means financial professionals are forced to pursue a moving target, as they must provide solutions that are specifically tailored to a client’s desires, and those desires may shift as a client ages.
The latest Transamerica Retirement Survey provides some insight into how people’s view of retirement has changed, and offers financial professionals an excellent starting point for conversations about individual retirement goals. Financial professionals should offer every client an extensive policy review that examines the person’s existing retirement plan and insurance policies in relation to retirement aims. The survey gives producers valuable insight into what consumers are thinking today.
Even high net worth individuals worry
Financial professionals know that high net worth individuals encounter specific retirement planning challenges. While these consumers may have a significant amount of income, they are not necessarily taking all the steps needed to prepare for retirement.
In Transamerica’s survey, 36 percent of individuals with an annual income in excess of $100,000 said they were not confident about their retirement savings. That represents a very large portion of the high net worth population that remains unsure about how to properly save for retirement. Financial professionals should view this as an opportunity. The 36 percent of high net worth consumers who feel unprepared for retirement are potential candidates who can be become confident with the help of a financial professional.
What confidence looks like
The majority of people now enter a second career after retiring, according to data collected by Merill-Lynch, and that’s inspired many to report that people generally anticipate working into their retirement years. While that’s certainly a goal for some people, it may not be a universally accepted pattern.
Transamerica discovered that just 37 percent of people intend employment to be a source of income in retirement. The rest of the population intends to live off alternate income resources and their savings. This particular statistic demonstrates how important it is for people to invest in retirement planning options that guarantee consistent income. Otherwise, a broad swath of the population could begrudgingly end up working jobs just to maintain a lifestyle in retirement.
Retirement confidence, therefore, looks like the freedom to avoid extra work during retirement.
How retirement occurs
One of the most interesting findings in the Transamerica survey involved the way that many people see themselves entering retirement. While lower-income individuals saw retirement as a sudden break from the working world, high net worth consumers envisioned a more gradual transition. These individuals don’t necessarily want to work in retirement, but they believe they will have a job that is flexible enough to allow them to reduce their workload as they age. Financial professionals can take this into account as they plan for retirement and structure a retirement strategy that escalates retirement income as people start spending more time outside of the office.
What these surveys make clear is that there is widespread uncertainty about retirement from people across the income spectrum. Financial professionals are uniquely positioned to eliminate some of this uncertainty and provide concrete solutions to people’s retirement concerns. Annuities and life insurance policies that allow people to receive consistent income in retirement will be in high demand from people in every income bracket. Americans generally want to enter retirement and leave the working world, which is possible if they get the help a financial professional can provide.
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