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Where Your Clients Work May Affect How They Retire

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Survey data (Surce: IALC) (Source: IALC)

Do you analyze your clients by looking at what industry they work in? If not, maybe you should.

The State of America’s Workforce, a national study commissioned by my group, the Indexed Annuity Leadership Council (IALC), offers a comparison of workers by industry.

We segmented data by industry to see which workers are retirement ready, which workers rely the most on financial advisors for advice, and what workers seeking in retirement.

Here’s a look at three things found.

1. Retirement-Readiness Scores

Overall, the IALC’s newly released retirement-readiness scores show workers in two blue-and gray-collar fields, Engineering and Protective Services, are better prepared for retirement compared to all workers – outpacing even white-collar employees.

(Related: 3 Ways to Help Americans Save More for Retirement)

Yet, overall, workers in blue-collar and gray-collar industries are less prepared for their golden years, with eight of 11 scoring below the average retirement-readiness score for all American workers.

The numbers are especially bleak for workers in the Food Preparation and Serving, and Personal Care industries. Workers in these industries reporting having much less access to employer-sponsored plans — which, traditionally, have been provided workers with their main opportunities to accumulate retirement savings and create a source of lifetime income.

2. Workers’ #1 Retirement Goal

Lifetime income is workers’ number one retirement goal across industries.

Regardless of industry, the majority of America’s workforce is seeking stable income to last a lifetime. Unfortunately, more than three-quarters of workers plan on meeting this need by relying on Social Security.

Yet, with questions of whether Social Security will be enough to sustain lifestyle and the sustainability concerns of the program, many workers are turning to employers, financial advisors, and friends to learn about other accumulation and longevity products, such as fixed indexed annuities.

3. Use of Professional Help

Workers’ use of financial advisors varies across industries.

Beyond choosing an investment strategy, workers often make life changes and choices to better position themselves for retirement.

Four out of 10 pre-retirees say they have consulted with a financial advisor.

The share of workers who have sought professional advice is slightly lower for blue-collar workers.

The percentage of workers who say they have prepared for retirement by adjusting lifestyle choices that impact their finances is similar.

In fact, The State of America’s Workforce found that more than half of pre-retirees who feel “very ready for retirement” rely on financial advisors for guidance.

Workers in blue-collar fields, including those in the Healthcare Practitioners and Technical fields, and those within the Protective Services industry, lead the pack in turning to a financial advisor for retirement advice.

Meanwhile, many workers in the Food Preparation and Serving category are not even sure who to ask for advice.

Workers who are “not ready at all” for retirement are less likely than their peers to engage in preparation tactics. Only about a quarter of the completely unprepared workers have adjusted lifestyle choices. Just 11% have consulted with financial advisors.

— Read What Americans Will Miss Most When They Retireon ThinkAdvisor.

Jim Poolman is executive director of the Indexed Annuity Leadership Council. From 2001 through 2007, he was the North Dakota insurance commissioner.


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