Retirees are increasingly rethinking their financial strategies and lifestyles as the traditional perceptions of retirement evolve, according to research from Nationwide.
Drawing from its ninth annual Advisor Authority study, the firm said nearly one-third (31 percent) of retirees anticipate feeling less secure in their retirement compared to previous generations.
This uncertainty is compounded by ongoing financial obligations. Over one-fifth (22 percent) of retired investors are concerned about affording their monthly expenses. Moreover, 26 percent of retirees continue to pay off their mortgage, while 25 percent are still dealing with credit card debt.
"The picture of life after retirement has changed for many people as economic stressors continue to weigh on retired investors," Mike Morrone, vice president of Nationwide Annuity Business Development, said in a statement Monday.
Beyond the spending shift that comes with retirement, many retirees are making adjustments in the face of economic headwinds. Nearly four in ten (39 percent) retirees are reducing spending on entertainment, and more than a third (34 percent) are cutting back on travel.
To meet financial needs, 22 percent of retirees are drawing more funds from their retirement accounts, intensifying the traditional decumulation phase. A small but notable minority are also moving away from long-standing retirement planning rules, with 12 percent abandoning the 70-80 percent spending rule and 11 percent giving up on the 4 percent withdrawal rule.
In response to financial challenges, nearly two-thirds (63 percent) of retired investors have strategies to protect their assets against market risk, a notable increase from 54 percent last summer. Conversations about legacy planning and wealth transfer are also becoming more common, with 32 percent of retirees discussing end-of-life wishes and 34 percent talking about estate financial details with heirs.
To help guide clients toward retirement security, advisors are helping retired clients generate guaranteed income (23 percent), prioritize needs over wants (21 percent), and supplement income as necessary (16 percent). Additionally, 34 percent of advisors report that their clients plan to continue mortgage payments during retirement.
“Advisors are recognizing and acknowledging investors’ desire to avoid making the wrong moves in retirement,” Morrone said. “They can help clients feel more confident about their retirement plans by understanding their goals and anxieties, and helping them protect their savings [with] different retirement solutions and products, like annuities.”
As the Great Wealth Transfer progresses, advisors are also assisting clients and their heirs in preparation. Over half (59 percent) of advisors in Nationwide’s survey indicate that their clients are confirming beneficiary designations, while 54 percent are reviewing or creating estate planning documents. Additionally, 44 percent of advisors are focusing on building financial confidence and knowledge among clients and their heirs.
Chicago-based Mesirow Fiduciary Solutions adds flexPATH's plan-level outsourced fiduciary book, boosting its retirement market reach to $164 billion.
Also, Raymond James's employee advisor channel adds breakaways from Wells Fargo and Stifel, while UBS welcomes an ex-Morgan Stanley duo in Indiana.
It promised guaranteed principal and 10% monthly returns. The SEC says it invested nothing.
Ten years after entering the fee-based annuity market, MassMutual Ascend says nearly half its lifetime sales came in the past two years alone – but barriers remain among fee-only advisors.
Amplify, WealthReach, Zeplyn and Zocks have unveiled partnerships aimed at automating portfolio management, content creation, account opening, and client communication.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
