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Senior Survey 2011

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So, just when are our nation’s seniors going to actually retire? According to Senior Market Advisor’s latest survey, 86 percent of the roughly 200 people age 60 to 81 and above who took the poll said they have yet to leave the cubicle life behind them. When asked why they are still working, 63 percent said it’s because they, well, like to work.

Now, that high percentage of still-toiling seniors could have to the do with the fact that 52 percent of those who took our survey classified themselves as between the ages of 60 to 65–years when many healthy seniors can still work if they prefer (or have to).

Yet 19 percent said they’ve postponed retirement “to stay above water.” Or as one respondent said: “Have no choice but to work.”

Those were just some of the results culled from SMA’s 2011 survey, which was completed in mid- to late May. Seniors were queried about everything from their retirement outlook and the impact of the financial meltdown on it; estate plans (or lack thereof); housing preferences and, of course, what they look for in an advisor. A quarter of respondents had a total annual household income of $100,000 or more, with more than half boosting total assets, including their home, of between $250,000 to just under $2 million.

Some of the results were a bit surprising; others, not so much. In their comments, several seniors made it clear they are definitely worried about what is going on in Washington, D.C. and how it will affect their plans for the future. “The proposed $500 billion of cuts to Medicare, plus more cuts and changes coming whether through Republicans or Democrats, are terrifying. We need to pull out of three wars and save our own people,” said one respondent. “Who knows?” said another. “Given the current Congress, the President and the way they are messing with even basic services.”

Despite the hit their portfolios took back in 2008, only a quarter (24 percent) said the financial meltdown kept them working longer than they’d like. And most stated they were either very to somewhat confident they could meet their retirement goals.

Nevertheless, other results indicate that only about half of seniors have planned sufficiently for the future. Less than half–46 percent–have purchased LTCI, with a clear majority (58 percent) indicating they feel it is too expensive. “Don’t feel it is the best product for the money,” said one. Yet when asked to comment on the question, most said it was because health issues make them uninsurable.

More encouraging, a majority–56 percent–have set up an estate plan, but 70 percent of those who haven’t expressed no interest in doing so. Some may be carrying a bit too much debt as they enter the retirement years: 33 percent said they would use a $25,000 windfall to pay off their liabilities, and nearly half (46 percent) said they still owe on their home.

“I’ve been stupid with money all my life. I wish I could learn to make good financial decisions,” lamented one senior. That’s where you come in, advisors. And it’s a good thing 62 percent said they do get financial advice. What follows are highlighted results and comments from the respondents. We thank all those who participated.

Click here to view One Senior’s Story video.


Seniors fret over possible tax increases,
cuts to Social Security, Medicare

What’s keeping retirees up at night? According to data from LIMRA, more than half of seniors are worried about possible tax increases as well as cuts to Medicare benefits and Social Security.

In February, the organization surveyed retirees between the ages of 55 and 79 with household incomes of $35,000 or more on their top concerns regarding public policy, market risks and health-care costs. Topping the list of “major concerns” that would have an impact on their living standard in retirement were tax hikes, cited by 60 percent. Next up was a reduction in Medicare benefits (58 percent); cuts to Social Security (55 percent); and inflation (50 percent).

Rounding out the list were: a prolonged stock market downturn (44 percent); health-care costs (43 percent); decline in interest rates (37 percent); prescription drug costs (35 percent); long-term care costs (35 percent); and the possibility of outliving assets came in last at just 21 percent.

Matthew Drinkwater, associate managing director, retirement research at LIMRA, said he wasn’t surprised by the results. “For one thing, we know that retirees don’t want to hear about cuts to Medicare or Social Security or tax increases as a budget balancing option,” he said.

Given these results, Drinkwater recommended that advisors address these concerns with clients as part of an overall risk management approach. “Retirees can’t change public policy or prevent it from being changed. But they can protect themselves by working with their advisors to plan for these things holistically,” he said. “The advisors need to have plans that are robust enough to work in crisis times. If the client has major concerns about Social Security, well, that means they have concerns about inflation-protected lifetime guaranteed income. That fact should be on the table when an advisor is talking to their client.”

While he thinks it would “be political suicide to just nail seniors with all of these cuts” and that any changes to those programs would be gradual, Drinkwater said that increases to state and local taxes are more likely due to those jurisdictions budgetary pressures. “So advisors could try to diversify assets across taxable, tax-deferred and tax free-investment types,” he said.

Other research reveals just how anxious retirees are today. Using a survey of consumers done in April by eNation, a national online research service, LIMRA extrapolated the results from nearly 150 retirees. When asked, “I worry that my taxes will increase,” 67 percent agreed.

When queried whether they were confident they would be able to live the retirement lifestyle they desired, 43 percent agreed. Compare that percentage to a 2009 survey LIMRA conducted in which 62 percent agreed. LIMRA based its results on nearly 400 retirees with at least $100,000 in investable assets.

In another interesting finding, earlier this year, 26 percent agreed with the statement “Compared to what I thought a year ago, I now need to go back to work.” That’s a slight increase from the 2009 LIMRA study in which 25 percent agreed.