Wave Magazine – Clients Are Keeping Their Retirement Woes Secret

Does this sound familiar to you?

  • 71% worried about the rising costs of healthcare
  • 67% worry about rising costs of living
  • 66% afraid market downturns will affect their savings
  • Only 1/3 have broached the subject with their advisor

 These are the findings of The Allianz 2021 Retirement Risk Readiness study. The percentages represent significant increases from the survey’s 2020 results.

More than ever,  Americans are troubled about risks to their retirement plans, but they are not discussing their concerns with their financial advisors. And it is apparent my fellow professionals are failing to ask the pertinent questions of their clients. So, the investors as well as the professionals, are playing darts in the dark. 

Lots of investors had a lot more time to sit and imagine about how bad things might get in the near future. They watched in real time how markets can go awry as the cost of living increases right before your very eyes. COVID-19 could have been the main actor behind growing retirement concerns, said Kelly LaVigne, vice president of Consumer Insights at Allianz Life, per Barron’s. 

The pandemic “made people think a lot more about their savings and possibly put a little more fear of reality into their recognition of what’s going to happen in the future,” according to LaVigne. 

Of the 1,000 respondents the survey shows there is genuine concern about the ability to take care of themselves and loved ones, social security benefits, outliving their spouses or significant others, and running out of money before they run out of time. 

La Vigne went on to say, “We have a problem with advisors listening to their clients and getting them to share what their number one fear is.”  As a financial advisor I apologize for my peers failing to ask better questions with the sincere intent of supporting our clients in preparing for the good, the bad, and the unforeseen. As I am fond of saying, “It’s not about the prediction. It’s all about the preparation.” 

It is my experience that when many financial advisors declare they have been in business 40 years, for example, the truth is, we’ve been in the securities industry one year, repeating the same thing over the length of time licensed. Frankly, many of us are lazy, complacent, and overly focused on the ‘stocks for the long-haul’ mantra. 

LaVigne counsels, “Don’t jump in. Let them totally finish, ask a follow-up question on that same subject-make sure you (the pro) listen and then make sure you talk about that.” I totally agree with LaVigne’s suggestion that advisors work with clients to create a written financial plan, that is reviewed no less than once a year, that focusses on the clients’ biggest fears, folding in protections for those concerns, as we support clients in discovering, often for the first time, how much loss can you the investor can accept. Followed by designing the portfolio in such a way that it might perform withing your acceptable, pre-determined limits of losses and gains. Let’s let the market go down like the Titanic, but do all things possible to keep your money at or above your personal water line. 

LaVigne points out while newer retirees are focused at the inflation numbers, they “are feeling terrified.”  Those who have been retired for more than 10 years benefitted from some of the best conditions for retirement-a strong bull market and controlled inflation, notes Barron’s. 

Looking forward, some observers suggest that there is real evidence that the next decade for stocks won’t be as good as the last. Now is the time for investors and advisors to huddle as we plan for a lot more uncertainty ahead.

John Grace owns Investor’s Advantage, a personal finance planning firm in Westlake Village.

Weekly Newsletter

Investor’s Advantage strives to support our community in their struggles to overcome the fear of finance, so we’ve developed and continually add to an extensive library of financial, education content. Join our newsletter to receive weekly Investor’s Intelligence, where we cover the latest in market trends and all things finance to give all Investors an Advantage.

More Investor’s Intelligence

200 N. Westlake Blvd., Suite 109

Westlake Village, California 91362-3783

805.495.2077   800.266.2077   888.WHY.BEPOOR

Fax: 805.497.8342

wordpress-173703-781067.cloudwaysapps.com


Securities offered through Securities America, Inc. (SAI), Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Investors Advantage and SAI are separate entities.

Important Information from FINRA to consider before transferring your account. Trading instructions sent via email may not be honored. Please contact my office at (805) 495-2077 or Securities America, Inc. at 800‐747‐6111 for all buy/sell orders. Please be advised that communications regarding trades in your account are for informational purposes only. You should continue to rely on confirmations and statements received from the custodian(s) of your assets. The text of this communication is confidential and use by any person who is not the intended recipient is prohibited. Any person who receives this communication in error is requested to immediately destroy the text of this communication without copying or further dissemination. Your cooperation is appreciated.

An informed investor is a smart investor.

Limit your exposure by pinpointing your Risk Number, and craft a portfolio that aligns with your financial priorities.

Get Your Risk Number