As inflation continues to shift retirement income and investing attitudes among American workers and retirees, a new report finds individuals are uncertain on how to manage their investments.
Income Outcomes: A Retirement Planning Confidence Study, conducted by the Western & Southern Financial Group and in collaboration with LIMRA, reports that 47% of retirees and pre-retirees are either only slightly (30.5%), or not at all (16.7%) confident in maintaining their investments throughout retirement.
“Understandably, drawing down assets after decades of building them up presents a challenge for many either facing retirement or in it.”
Jill McGruder, Western & Southern
Women pre-retirees and low net worth respondents were especially susceptible to feel unsure, with 56% and 55% expressing little to no confidence, respectively. High net worth individuals, on the other hand, were over twice as knowledgeable in retirement income planning compared to their low net worth counterparts (57% vs. 24%).
Retirees and pre-retirees alike voiced the same four retirement concerns yet ranked each one differently from one another. For retirees, their leading worries are Social Security cuts (61%), inflation (60%), running out of money (54%) and healthcare costs (46%). For pre-retirees, their greatest fears are running out of money (70%), healthcare costs (57%), inflation (54%) and Social Security cuts (49%).
“Understandably, drawing down assets after decades of building them up presents a challenge for many either facing retirement or in it,” said Jill McGruder, senior vice president and chief marketing officer of Western & Southern, in a statement. “Having access to the right products, resources and guidance takes on added importance as retirement nears and begins.”
Such resources include a formal, written retirement plan on hand to read through and understand. Of those who have a formal plan, 51% say they are very or extremely confident their plan will provide income throughout retirement.
Working with a financial professional will likely increase confidence with planning and ultimately, in retirement. Of the top qualities a financial professional should possess include transparency (as noted by 53% of respondents), along with ethics (mentioned by 46%).
“The message is loud and clear. Uncertainty in managing one’s own investments in retirement signals a need for guidance,” said McGruder. “Financial professionals play a key role in educating clients on making sound retirement decisions. Tremendous opportunity exists for financial professionals to initiate the income planning process and help build much needed retirement confidence.”
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.