Bill Benjamin of US Bancorp launched day two of the IRI annual conference Tuesday by citing some sobering statistics about the state of retirement readiness in the U.S.
One-third of retirees will depend entirely on Social Security benefits, he said, citing the Social Security Administration’s own report from January. For those in the room and in the advisor universe who help clients plan for retirement, the CEO of U.S. Bancorp Investments said “we need inspiration” considering the scope of the retirement problem: 10,000 baby boomers daily are reaching retirement age, a pace that will continue until 2029. The last of the boomers will turn 50 this year, and the average 50-year-old has only saved $43,000 for retirement.
Moreover, Benjamin noted that 70% of people over age 65 will need long-term care in their lifetimes, at a current cost of $85,000 a year for a semi-private room in a nursing facility. And those numbers don’t even begin to address quality of life issues for older Americans.
Then there’s the increase in life expectancies. He quoted an Economist article that pointed out that Americans’ life expectancy has increased two years for every decade over the past 50 years.
Those numbers constitute, Benjamin said, “a massive opportunity for us, for the industry and for each of our companies.” That opportunity and challenge is also “where IRI should, and does, play its biggest role: taking all the leadership in this room and going to the Hill” to advocate before Congress, but also to educate clients and to provide them with the solutions that retirees will need.
Benjamin then turned over the podium at the IRI meeting in Williamsburg, Virginia, to Suzanne Siracuse, publisher of InvestmentNews, who moderated a panel representing asset managers, retirement plan providers, advisors and insurers whose members addressed those challenges and the role the industry can play in helping Americans meet those challenges.
Panelist Nick Lane, senior executive director and head of US Life & Retirement for AXA, kicked off the discussion by saying that in retirement planning “the demand side is well documented,” but the supply of advisors to help with that demand is the first challenge. To counter the trend of fewer advisors, he called on the industry to “recruit and bring more women into the industry itself; if we had more women we could meet more demand.” (See Investment Advisor’s October 2014 cover story on this very topic, Seen and Heard.)
Further, Lane called for “the institutionalization of insurance as an asset class.”