As Americans evaluate their finances during these challenging times, many financial professionals may be missing opportunities to shift conversations about retirement from accumulation to protection. The new 2020 Retirement Risk Readiness Study from Allianz Life Insurance Company of North America (Allianz Life) surveyed three categories of Americans to get different perspectives on retirement: pre-retirees (those 10 years or more from retirement); near-retirees (those within 10 years of retirement); and those who are already retired. The findings reveal gaps in conversations with financial professionals that can help clients protect their retirement assets from some of the risks that can derail savings strategies.
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“It’s important that we continue to discuss different options for protecting against market volatility with clients, even during times when markets are performing well.”
Although people who have already retired are fairly confident about how long their money will last, six in 10 non-retirees said running out of money before they die is one of their biggest concerns. But unfortunately, only about a quarter (27%) of non-retirees who work with a financial professional have discussed this aspect of longevity risk and less than 15% have shared their concerns that they won’t have enough money to do the things they want in retirement.
As it pertains to saving for retirement, many non-retirees seem to understand steps they need to take, but aren’t following through. More than half (55%) of non-retirees said they are worried they won’t have enough saved for retirement and nearly one-third (31%) say they are way too far behind on retirement goals to be able to catch up in time. Yet only 12% said setting long-term financial goals is their top priority and merely 6% identified developing a formal plan with a financial professional as their top priority.
“These responses show there may be a reluctance or lack of opportunity for clients to share the concerns they worry about most in the conversations they are having with their financial professionals,” said Kelly LaVigne, vice president of Consumer Insights, Allianz Life. “Financial professionals may need to be more proactive in discussing these issues and find ways to make clients share more openly so we can develop appropriate solutions.”
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