Seaton Financial

Study finds even affluent retirees are concerned about their financial security.

A new study from Cogent Research indicates that even affluent investors are expressing dread when it comes to their financial security during retirement. Furthermore, many high net worth retirees and pre-retirees show a significant lack of planning, confusion about the retirement income products available to them and a general mistrust toward financial advisors and asset management firms.

These and other findings are featured in a new study examining the behaviors and attitudes of pre-retirees, conducted by Cambridge, Mass.-based Cogent Research. The study, The Retirement Income Dilemma, is based on a series of focus groups among affluent ($250,000 in investable assets) and high net worth investors ($1 million or more investable assets) ages 45 to 65. The groups were further segmented by investors who are at or near retirement, and others with retirement on the horizon in five to 10 years.

“This in-depth, qualitative study reveals that the perceived widespread ‘doom and gloom’ attitude about retirement planning —whether prompted by the news media or simply informal water cooler conversations—is rooted in reality,” says Alan White, project director, Cogent Research. “The fact that even the most affluent of investors among us show clear signs of anxiety, confusion and lack of direction suggests a budding retirement income crisis in America. Furthermore, it is clear that financial advisors and asset management firms have a long way to go in terms of proving themselves as resources to investors.”

The Retirement Income Dilemma highlighted the following top 10 investor concerns:

1. Fear about not maintaining current standard of living.
2. Healthcare/prescription costs.
3. Availability of social security.
4. Outliving assets.
5. Inflation of U.S. dollar.
6. Market conditions/performance during retirement.
7. Leaving legacy for children/heirs.
8. Impact of taxes on income.
9. Paying for children’s education.
10. Caring for elderly parents.

What's interesting is that many of these top concerns can be addressed by independent insurance agents. Certainly, fears about not maintaining a current standard of living and outliving assets and inflation of U.S. dollar can be addressed through the use of inflation-adjusted immediate annuities. And Medicare supplement insurance and long-term care insurance can help to mitigate the costs for retirees concerned about healthcare/prescription costs and caring for elderly parents. Paying for children’s education and leaving a legacy for children/heirs can also be met through the use of Section 529 plans and permanent life insurance. In fact, independent insurance agents are well positioned to assist their affluent and non-affluent customers with meeting a number of their retirement objectives. 

Independent agents should revisit the breadth and depth of the products they offer to capitalize on their client lists and relationships. Ensuring that other risks --- personal liability, getting in a serious accident with an uninsured/under insured motorist and having adequate disability insurance --- are dealt with is the recipe for maximizing the value of being an independent insurance agent and providing holistic solutions to the agency’s customers.

Concerned about your retirement and how to protect your income? Call me to find the right solution for you.

Matthew Seaton - Seaton Financial

Go to www.seatonfinancial.5u.com for more information, or call Seaton Financial at 651-964-4405.

(Edited from IIABA.net, Dave Evans)