- Faith in today’s retirement system is failing (but that’s probably no surprise).
- Meanwhile, hope is alive when it comes to retirement aspirations and bucket lists.
- Leverage this infographic to ask questions and listen to clients to help inspire a brighter future for retirement.
There is a disconnect between how Americans plan to spend their retirement and how they’re preparing for it financially. This may not come as a surprise to you. As a financial professional, you may have encountered the gap between your clients’ retirement dreams and what their retirement plans can afford. Turns out, this scenario is playing out across the globe.
People are losing confidence in Social Security, pensions, or other retirement plans — and who’s to blame them?
Social Security costs exceeded the program’s income this year for the first time since 1982. And despite the vital benefits retirement plans provide, employers aren’t offering 401(k)s as frequently as you might hope. In addition, 57% of Americans have access to a plan with an employer match, according to the 2018 Aegon Retirement Readiness Survey.
All of this combined is creating a climate in which workers are losing faith in the system and nearly half of them predict future retirees will be worse off, according to the Aegon Survey.
Despite challenges, a positive mindset persists
Though people may have reservations about the system, they remain optimistic when daydreaming about life after work. In fact, top aspirations are a hopeful bucket list: travel, spend time with family, pursue hobbies, and volunteer. Yet Americans concede that they’ll need to replace about 66% of their income to live comfortably, and only 25% are on course to achieve that amount, according to the Aegon survey.
The top retirement concern
The No. 1 concern of American workers is running out of money in retirement, according to the same survey. Have you asked your clients what they’re most concerned with? Perhaps bringing any concerns to light — and finding a strategy to assuage them — could alleviate some worry.
Help them write down a plan
Do your clients understand the importance of writing down a plan? Worldwide, people who have a written retirement plan are more confident they will retire with a comfortable lifestyle than those who don’t, according to the Aegon survey. Ask your clients to imagine their goals, what they would like to do, and how they would like to live in retirement. Most importantly, listen to what’s on this list, and then take it from there.
Hope for health, but plan for medical costs
Are your clients worried about becoming ill in retirement? How long do they expect to live? Smart retirement plans consider health care costs and unexpected medical bills. The average couple retiring at 65 years old today will need $280,000 to cover health and medical expenses in retirement.
As the majority of people worldwide cite declining physical health as a top concern in retirement, perhaps now is a good time to talk about preparing for medical bills.
Diversify savings and investments
Don’t forget about the many ways your clients can create income in retirement.
- The basics : Social Security, savings accounts, pension, IRA, 401(k)
- Forward looking : Life insurance, inheritance, investments, annuities
- Assets : Income or equity from a home, sale of a business, sales of other assets
Many of your clients are bound to share some of these concerns — and popular hopes — for retirement. Share this infographic and open the conversation about what they’re anticipating and how you can help.
Things to Consider:
- Running out of money, getting sick, or not being able to stay active in retirement are common concerns.
- Hopeful aspirations about life in retirement are common as well.
- Asking about these hopes and worries gives you a chance to narrow your clients’ strategies and boost their confidence about retirement.
The 2018 Aegon Retirement Readiness survey has thoughtful ideas for creating plans for pursuing a financially secure retirement. From it, you can glean incredible insights into the minds of retirees today. You can show your clients that you’re listening by asking questions, tackling some of those worries, and creating personalized retirement plans that help pursue their dreams.
Neither Transamerica nor its agents or representatives may provide medical, tax, investment, or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.
Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as, medical, insurance, securities, tax, legal or financial advice or guidance. Please consult your personal independent advisors for answers to your specific questions.