Conversation starters for National Retirement Security Week, October 15-21

With the turning of leaves and cooler weather, the month of October often symbolizes change. There’s perhaps no greater change in a person’s life than when they transition from a lifelong career into retirement.

Perhaps that’s one reason the National Retirement Security Week was established by Congress in 2006 to be held the third week in October. The observance is intended to raise public awareness about the importance of adequate retirement savings and the availability of employer-sponsored retirement plans.1

This year’s observance is October 15–21, presenting an opportunity for financial professionals to engage with clients and encourage them to take a fresh look at their financial strategies.

Need some talking points or ideas on who to connect during this year’s observance? Consider the following facts when having your conversations.

Disparities remain

The U.S. Government Accountability Office (GAO) recently released data comparing retirement account savings between 2007 and 2019. Despite efforts to raise awareness, the disparities between low-income and high-income older workers (ages 51–64) have increased.2 

Only one in 10 low-income households had a retirement account balance in 2019 compared to about one in five in 2007. Racial disparities persist as well, with White households holding double the balance of retirement savings than other races.2

Consider your firm’s diversity initiatives and how you can engage those who may face retirement disadvantages.

Married couples save more and women save less

We’re all familiar with the wage gap between women and men. The lower earnings by women are also reflected in their retirement savings. About half of women ages 55 to 66 report having no personal retirement savings, compared to 47% of men.3 

Both statistics are concerning, but those numbers improve when they’re married, having higher and more comparable savings. Among couples who’ve married once, only 35% report having no retirement savings, about a 15% improvement. About 60% of those who’ve never married have no retirement savings.3 

Financial professionals may want to consider reaching out to their female clients to talk through their strategic financial goals, in addition to those who are unmarried.

Inflation is eating away at retirement savings

It’s no secret that the cost of living is increasing. But by how much?

According to the U.S. Bureau of Labor Statistics, the average American 65 and older saw their annual expenses rise about $5,000 in a single year. Annual expenses in 2020 averaged $47,579,4 and they rose nearly 10% to more than $52,000 in 20215.

The hope is that such a steep increase in expenses is an anomaly, yet meeting basic living expenses in the future and keeping up with inflation need to continue to be a part of any investment strategy.

The average monthly Social Security retirement benefit is $1,8256

That adds up to just under $22,000 per year — less than half the annual expenditures for those age 65 older mentioned above. In other words, Social Security can provide guaranteed income in retirement, but it won’t be enough to live on for most. If your clients don’t have a clear idea of their estimated monthly Social Security income, it’s tough to expect them to have a solid retirement savings goal.

Fortunately, the Social Security Administration makes it easy to calculate an estimate of future monthly payments to serve as a starting point for understanding when a client should ideally begin receiving benefits, and how much savings will be needed to bridge the gap between Social Security and living expenses.

It’s important to keep in mind that the online tool is intended only as an estimate. You can encourage clients to log into their Social Security accounts for more accurate information about their retirement benefits. Even with more precise numbers, it should be easy to see the gap between the lifetime retirement income of Social Security benefits payments and your clients’ anticipated day-to-day living expenses in retirement.

These facts combined with the annual observance of National Retirement Security Week provide a unique opportunity to help clients explore the value of guaranteed lifetime income in retirement. As you develop individualized retirement planning strategies with clients, you can help them understand, for example, that delaying Social Security benefits doesn’t have to mean delaying retirement.

You can encourage clients to explore deferred income or immediate annuities as a way to convert a lump sum from their retirement savings into guaranteed income that may help them bridge the gap between their Social Security benefits and their retirement income needs.

National Retirement Security Week can help drive awareness of your practice and the ways you can help clients achieve retirement security. Tap into our Elevate™ Advanced Planning Resources to help address clients’ questions about income planning, rollover opportunities, legacy planning and more — get appointed to access our full library of tools, resources and support for financial professionals.

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