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Most Americans Hesitate to Discuss Retirement Concerns With Advisors

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What You Need to Know

  • These Americans would welcome such a conversation despite their initial reluctance, an Allianz Life survey has found.
  • Top concerns include rising health care costs, the cost of living, and running out of money before they die.
  • The study found an opportunity for financial professionals to help working clients and retirees with such concerns.

Two-thirds of Americans are not discussing concerns about their finances and retirement savings with their financial advisor, but would welcome such a conversation, according to survey results released in late June by Allianz Life

The finding presents financial professionals with an opportunity to help clients who are in the workforce and those already in retirement address retirement risks.

Seventy-one percent of respondents expressed concerns about health care costs, up from 65% in 2020, 67% about the rising cost of living vs. 59%, 66% the effect of a market downturn on retirement savings vs. 54% and 59% running out of money before they die, up from 56%. 

Issues that two-thirds of study participants said they are most interested in getting professional guidance on, but have not discussed with their advisor, are running out of money before they die, how a market downturn will affect their savings and being too conservative in investments and missing out on market gains. 

More than half said they would like to discuss concerns about high health care costs, the rising cost of living and lack of funds to do all the things they want to do in retirement. 

“It’s no secret that Americans are uncomfortable discussing financial topics, but it’s troubling that this reluctance extends to conversations with their own financial professionals,” Kelly LaVigne, vice president of consumer insights at Allianz Life, said in a statement. 

“If they don’t feel comfortable addressing these concerns with the very people who are there to help plan for the future, it’s unlikely they’ll take any action to address the various risks that could jeopardize their retirement, and that needs to change.” 

Allianz Life conducted an online survey in the U.S. in December with a nationally representative sample of 1,000 people 25 and older who had an annual household income of at least $50,000 if single or $75,000 or more if married or partnered, or had investable assets of $150,000.

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Where Opportunity Lies

Researchers surveyed three categories of Americans to get different perspectives on retirement: those 10 years or more from retirement; those within 10 years of retirement, and those who are already retired. 

Although the study found a clear opportunity for financial professionals to assist pre- and near-retirees, a first look at the findings showed that retired respondents were less anxious about risks to their retirement. 

A closer analysis, however, revealed a distinct difference between those who are less than 10 years into retirement and those 10 or more years in retirement in terms of both their level of worry and their willingness to get professional help. 

Recently retired respondents reported significantly more concern about the majority of retirement risks when compared with those who have spent more time in retirement:

  • Health care costs being too high: 64% vs. 40%.
  • Rising cost of living: 54% vs. 27%.
  • Effect of a market downturn on retirement savings: 61% vs. 39%.
  • Running out of money before they die: 46% vs. 24%. 

At the same time, the analysis showed that recently retired Americans are more willing to discuss retirement risks with their financial professional, especially a market downturn, running out of money and the rising cost of living. 

Preference for Protection 

The study identified a clear preference for protection products among survey respondents, which reflects the increased level of worry Americans are feeling about their finances this year, Allianz said.

Asked whether they would rather have financial products that have the potential for both big gains and big losses or products that protect from big losses, but come with smaller gains, 68% of respondents opted for the protection product. 

“These findings point to a clear opportunity for financial professionals to be more proactive and initiate conversations that can help people feel more confident about their financial future,” LaVigne said. 

“Whether it’s someone who is several years from retirement and needs more information about how to mitigate various risks, or a client early into retirement who is feeling anxious about market volatility and longevity risk, it’s important that open and honest conversations occur on a regular basis.”