Financial advisors are able to provide the greatest value once they fully understand their clients’ needs.  By having regular conversations with your clients, you can gather the necessary information to make the most intelligent and financially sound recommendations.  It’s also very important to understand how individuals, as a whole, are feeling about their financial future.  That’s why we would like to share results from one of the most reputable and longest-running retirement surveys in the nation, the Employee Benefit Research Institute’s Retirement Confidence Survey. 

For the 26^th year in a row, the Employee Benefit Research Institute (EBRI) has conducted the Retirement Confidence Survey (RCS), polling 1,000 workers and 505 retirees throughout the United States.  Of the 1,000 workers surveyed, nearly 21% are very confident about having the money for a comfortable retirement, maintaining its increase after the record lows experienced between 2009 and 2013.  Retiree confidence, on the other hand, continued to increase to a whopping 39%, up from 18% in 2013. 

While there is no doubt that “being able to afford a comfortable retirement” is still the most important goal in a client’s mind, the report revealed many concerning statistics associated with this goal that financial advisors should consider. 

Concern #1 – Retiring Early

The survey indicates a long-term shift in attitudes toward delaying retirement, with more workers expecting to postpone their retirement years, many because they can't afford to retire. Nearly 40% of workers expect to retire after age 65, up from a mere 11% in 1991.

In reality, of the 26% of workers that are planning to wait until at least age 70 to retire, only 8% of retirees said they actually did so. The RCS has consistently found that a large percentage of retirees leave the workforce earlier than planned (46% in 2016).  According to the survey, many Americans find themselves retiring unexpectedly due to a hardship, such as a health problem or disability and caring for a loved one.

Key Takeaway: With the financial consequences of an unplanned early retirement being so substantial, it is important for you to set realistic expectations with your clients, rather than making these decisions based on optimism.        

Concern #2 – Retiring with Debt

In the 2016 RCS, more than half of workers with a major debt problem are not at all confident about having enough money for a financially secure retirement, while a trivial 9% of workers are very confident about having enough money, despite their major debt problem. 

While these results are not at all surprising, the bigger concern is that Americans are far less likely to describe their level of debt as a problem, as compared to the first couple years of this decade.  In fact, the survey found that 15% of workers (down from 22% in 2011) and 8% of retirees (down from 15% in 2011) report their level of debt as a major problem. Most surprisingly, 67% of retirees reported they do not have a problem with debt, up sharply from the 55% who said the same in 2014.

Key Takeaway: When assisting with financial planning, it’s very important to gather any and every bit of information as it relates to your client’s level of debt.  Not only can this information help when making financial decisions, but it allows you, as their trusted financial advisor, to accurately understand their debt level without any confusion. 

Concern #3 - Not Confident About Retirement Planning

It comes as no surprise that the survey found that workers and retirees are less confident in their ability to plan for retirement than for any other activities. That’s why financial advisors, like yourself, have a job!

While 30% of workers say that they are very confident in their ability to do a good job of planning for retirement, a more significant 63% reported that they are very confident in their ability to do a good job in preparing a budget, 39% in choosing health insurance on their own (not through an employer), and 40% on deciding when to take Social Security retirement benefits.

“Workers are so paranoid about all the things they have to consider for retirement planning — how much to contribute, where to invest, when to retire, whether to annuitize, what’s the best withdrawal strategy,” stated EBRI’s Jack VanDerhei, Ph.D., “The list just goes on and on.”

Key Takeaway: There’s no doubt that your clients are scared and confused about the marketplace and their retirement.  If you’re not doing everything you can to put their minds at ease as they plan for their financial future, please call LifePro and learn about our upcoming Wealth Builder Academy. 

Click the button below to view the full EBRI Retirement Confidence Survey!