Financial Planners, Clients Remain Disconnected on Retirement Risks
Financial advisors and clients largely lack alignment when discussing healthcare needs in retirement.
While four in 10 financial professionals and consumers in a recent Alliance for Lifetime Income by LIMRA study list estimating potential costs and risks in retirement as one of the most difficult aspects when planning, less than half of consumers remember these conversations.
“These communications gaps around healthcare costs can undermine financial security,” said Jean Chatzky, education fellow at the Alliance’s Retirement Income Institute and CEO of HerMoney. “Even when [financial planners] raise healthcare costs, the message isn’t resonating. While an FP may come armed with projections, models, and risk tables, clear, simple language matters more to clients than charts and models.”
The findings exemplify a broad disconnect among financial planners and consumers—while 96% of planners say they’ve discussed physical health issues with clients, only 44% can recall the conversations. Similarly, even as 90% of planners remember speaking on cognitive decline, jus 31% of consumers remember.
The disconnect between parties extends to perceived risks in retirement and the stability of Social Security. According to the report, consumers who work with an advisor list inflation as a top retirement concern (63%), followed by healthcare costs (62%) and outliving savings (45%). However, financial planners don’t include inflation among their list of clients’ top concerns, rather listing outliving savings (56%), market volatility (51%) and healthcare costs (50%) as leading issues.
Consumers were also more pessimistic about the availability of Social Security once retirement comes. Over half (52%) of clients feel less confident in the system compared to five years ago, whereas 26% of advisors reported losing conviction in Social Security.
On conversations surrounding retirement income options, advisors believe clients understand annuities and the role they have in retirement planning “very well.” Yet, just 14% of clients report having a strong understanding of annuities.
Despite their differences, the study found that most planners and clients believe consumers will have enough savings to cover expenses in retirement.
The final chapter of Alliance for Lifetime Income by LIMRA’s 2025 Protected Lifetime Income & Planning (PRIP) study surveyed 3,502 consumers ages 45 to 75, with a corollary survey of 500 financial professionals.
Editor’s Note: This article has been updated to credit the study to Alliance for Lifetime Income by LIMRA.
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.
