There seems to be very few pre-retirees that can honestly say they have more money today than they did ten years ago. Knowing that, we are forced to ask questions as to how people’s concerns regarding retirement have been recalculated. Where did the boomer retirement plans go wrong and how do folks feel about their future in retirement? More importantly what are some doing about it now?
A recent survey was held by Allianz Life Insurance Co, and an overwhelming 92% of respondents to the survey said there is a retirement crisis in the United States. Amongst baby boomers the number rose to 97%. So here you have a massive number of people at the doorstep of retirement feeling like they are not ready to pass through into the next chapter of life.
What are the majority of people doing about it? And what can you do about it? Well there is a lot of information online that can help serve as a starting point on investing, and has perhaps led many investors to think they can handle everything on their own just by searching around the web.
According to the Allianz survey approximately 46% of Boomers currently work with a financial advisor. There were 29% who said they are receptive to advisors. But a quarter of the respondents said they don’t have a financial advisor and are not open to working with one. Among those who are working with an advisor, 44% said they should have learned more about building a solid financial plan.
So what do pre-retirees want from their financial advisor when working with one? Here’s a shocker, 87% said that ensuring the safety of their nest egg was “very” or “extremely” important and another 86% said that locking in a guaranteed income was “very” or “extremely” important.
Katie Libbe, vice president of consumer marketing and solutions for Allianz Life Insurance Co. said that annuities are essentially the only option that can provide guarantee income for life. The only problem, of course, is that annuities have a reputation for being difficult for the average individual investor to understand. Which means that advisors need to be certain they are properly explaining the various parts of an annuity to their clients, while the quarter of boomers who said they are not open to working with an advisor might want to reconsider that stance.
“They can be complex so we usually believe it’s best to have an advisor look at these options and explain them to the individual,” Libbe said. “They can actually be complex in a good way. They don’t just provide a steady stream, they also increase income. But it starts with the advisors so they can easily be understood.”
Closing notes from Finish Line:
When working with potential clients it is not unrealistic that we meet 3 and 4 times in order to ensure the client understands the annuity clearly. Especially when working with a guaranteed income rider. The first meeting is generally focused on gathering information about what might be important to the client, and introducing the different concepts. Educating our clients is our primary strength and one of the reasons our clients continue to recommend our services. Let us know what we can do for you.
