Page 16 - Investment Advisor July/August 2023

RETIREMENT/ANNuITIEs plANNINg

Specifically, 40% say they don’t have financial wellness more difficult, the data going forward is the lowest among gen-
a financial plan for retirement and “will shows. Planning for the new retirement erations and is also starting to trend
just figure it out when they get there,” reality appears to be particularly challeng- downward. Of note for the advisor com-
while 56% don’t know where to start ing for members of Generation X, defined munity, the evidence suggests this lack
planning beyond having a basic retire- here as those born between 1964 and 1978. of confidence could be driven by a lack
ment account like a 401(k) or IRA. Unlike millennials, who still have of financial knowledge.
As LaVigne highlights, many baby ample time to save before retirement, Allianz Life says Gen Xers are the
boomers believe they are better off with and boomers, many of whom are already least likely to have an understanding of
respect to retirement readiness than retired, Generation X is realizing that the mechanics of saving for retirement
previous generations, but Gen Xers and retirement is getting closer and that they — namely how long they expect to live
millennials are more pessimistic about may not be ready — nor do they have a in retirement, how many years their
their financial futures. clear picture of how to get there. money will last in retirement, how much
Many Gen Xers and millennials feel like According to Allianz Life, Gen Xers’ total money they will need to save for
shifts in health insurance and employer- confidence in their ability to financially retirement and what their health care
sponsored retirement plans have made support all the things they want to do costs will be.

3 Ways to Help retirees spend More

here are many emotions that come
Tto mind when one talks about
retirement, ranging from excitement to
ambivalence, but far and away the most
prevalent feeling for many clients is fear,
says Jamie Hopkins, managing partner of
wealth solutions for Carson Group. Fear
and concern are reasonable responses
when an individual is facing a rocky
financial outlook in retirement, Hopkins
says, but many clients who are demon-
strably retirement ready from a financial
perspective are also plagued by doubt. can deliver a lot of value by easing their for this added wealth within a long-estab-
In fact, as Hopkins recently explained clients’ fears about spending. lished income plan. Advisors can do a lot
in a video he posted to Twitter, one of “At first you might think this is a little of good by helping their clients spend
the key roles of the retirement-focused weird to be talking about encouraging in a sustainable way, and that can mean
financial advisor is to help the client spending,” he explains. “After all, don’t encouraging clients to loosen the purse
understand their unique readiness posi- we hear all the time that most retirees strings now and again, Hopkins says.
tion — and how their financial standing need to cut back and minimize their “The reality is that a lot of Americans
today translates to decisions about life- spending?” In some cases this is clear- are fearful and scared about retirement,”
style and spending in retirement. ly true, but as more Americans enter he explains. “They don’t spend as much
In some cases, this will mean help- retirement after successful careers and as they could, and so we have to actu-
ing the client see the need to set a strict decades of diligent saving and investing ally give people permission and show
budget and avoid excessive discretion- in retirement plans and private accounts, them how they can spend more without
ary spending. In other cases, however, there’s a tremendous amount of wealth running out of money in retirement.
the financial picture is a lot rosier, and that has been earmarked for retirement. We all get taught about the importance
the real hurdle to retirement success is What’s more, many older Americans of saving, but we don’t necessarily get
the client’s ingrained sense that “saving who are early in their retirement journey those same lessons about how to spend.
is good, and spending is bad.” In the real become the recipients of legacy giving You spend a career putting money into
world, things are much more complicat- from their elderly parents, and it can be the 401(k), and then you get to the end Adobe Stock
ed, Hopkins says, and the typical advisor psychologically challenging to account of your career and suddenly you are

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