According to The Society of Actuaries’ most recent “Risks and Process of Retirement Survey”, there is a significant increase in consumers’ concerns about their finances both before and after retirement. 61% of pre-retirees indicated a sense of unpreparedness to handle expenses that could exhaust their assets in retirement. 47% of retirees also fell into this category.
The SOA’s Committee on Post-Retirement Needs and Risks Chair, Anna Rappaport, said, “I am encouraged to see pre-retirees and retirees alike taking steps to mitigate …risks…eliminating debt, saving money and cutting back on spending. But I am still concerned that there is not a greater focus on long-term planning…” Consumers recognize that they face numerous financial risks heading into retirement as well as in their attempting to plan for an indefinite period.
The SOA stated, “Elevated concern permeates the survey results.” Inflation, retirement costs, and healthcare ranked as primary retirement issues.
Both pre-retirees and retirees surveyed anticipate an average life expectancy of 85. Given that the majority of consumers surveyed indicated an expectation of at least 20 years in retirement, financial planning is critical especially with fixed resources to manage. A concern for couples is to ensure resources are available for the partner living the longest.
Pre-retirement planning is vital and 401(k) advisors play a significant role in this process.
