Page 14 - Investment Advisor July/August 2023

RETIREMENT/ANNuITIEs plANNINg

By John Manganaro

U.s. Heading From retirement ‘Crisis’ to

retirement ‘Catastrophe’: Allianz

Market volatility and recurring financial crises are making the already difficult

process of retirement planning even more challenging, recent data suggests.

nless a major course correc-
tion is achieved, workers in
Uthe United States appear to
be on track for significant retirement
hardship, and a growing body of aca-
demic and survey research suggests
Americans are facing a grim new reality
after they retire.
The latest analysis pointing to this
conclusion was published on May 31 by
Allianz Life.
According to the firm’s new poll
of some 1,000 middle-class American
households with incomes above
$75,000 ($50,000 for singles) or invest-
able assets of $150,000 or more, market
volatility and recurring financial cri-
ses are making planning for retirement
extremely challenging. not only sound strategies to accumulate future to account for the disruption.
In a summary of the survey results, the money you’ll need in retirement, At the same time, 49% say that
L. Kelly LaVigne, vice president of con- but that also includes risk mitigation everyday costs are increasing so much
sumer insights for Allianz Life, suggests strategies to protect you from the inev- that they won’t be able to afford basic
the nation may be facing more of a itable rough patches,” LaVigne says. expenses in the future, and this is seen
retirement “catastrophe” than a retire- “The key takeaway here is that the new as one of the greatest risks to retire-
ment “challenge” or “crisis.” retirement reality requires everyone, ment success. This percentage is up
“Understandably, Gen Xers and mil- now more than ever, to have a plan and from 44% in 2022 and 38% in 2021,
lennials are feeling uncertain about the stick to it.” according to Allianz Life.
future. And looking back over the past The new data suggest the dynamics of Troublingly, nearly 40% of Americans
10-plus years, who can blame them?” retirement planning have dramatically admit their retirement strategy has been
LaVigne says. “From financial crises to shifted as Americans navigate inflation, derailed, and they aren’t sure when or
politics to the pandemic, we all have market volatility, financial crises, fear of how they’ll get it back on track. A solid
reason to wonder what else might be bank failures and other challenges. With majority of 56% consider “financial
just around the corner.” so many financial risks, many Americans crises” as a permanent part of their
The good news, he explains, is that may be trading a more secure financial retirement planning.
Americans can take action today to bet- future just to get by in the here and now, Other stats show a “remarkable” 61%
ter prepare themselves for retirement. Allianz Life says. of Americans say they are more afraid
Even in uncertain times, he says, proper For example, recent financial crises of running out of money than they are
planning will go a long way toward caused 46% of respondents to say that of death, but many are still not taking
securing retirement goals. they have reduced or stopped saving for the steps necessary to set themselves
“That’s why it’s so important to have retirement without plans to increase up for a successful financial future Adobe Stock
a written financial plan that includes their savings levels in the foreseeable and retirement.

12 InvesTmenT ADvIsor July/August 2023 | thinkAdvisor.com