Most Americans are acutely aware of their financial situations. A recent report reflects that 40% of U.S. consumers have had difficulty paying bills in the last year. Others who were unemployed, had reduced work hours, or couldn't work because of an illness were nearly twice as likely to experience a shortfall and live paycheck-to-paycheck.1 In light of recent global events and millions claiming unemployment in the U.S., those numbers could be staggering.
This focus on immediate needs has seemingly made saving for retirement a lower priority for many Americans. About 28% of those in their 60s have less than $50,000 in retirement savings, nearly two-thirds of 40-somethings have less than $100,000, and 66% of millennials don’t feel on track when it comes to saving for retirement (not reflected in table below).2
The struggle to save, coupled with not having a concrete financial goal for retirement, is a perfect storm for an individual’s savings falling far short of the suggested $1 million needed in addition to Social Security and/or other income streams.3
In total, the general financial outlook isn’t currently pleasant news to share with your clients. They are likely already feeling some degree of stress about it in their everyday lives, and being reminded of what they’re doing — or not doing — only adds to the burden.
As a financial advisor, you may be able to lighten the load by reminding your clients that precarious financial situations can usually be turned around, but it takes planning and it doesn’t happen overnight.
Emphasize to your clients that inaction and despair, while understandable when faced with not-so-good news, could make certain situations worse. At the very least, it won’t help them take steps to define and reach their retirement goals. Explain that there are tools like risk control annuities designed to make any money they’ve saved work harder for them and possibly net greater returns.
Learn more about retirees’ situations and discover options you can present by reading our guide: Are Your Clients Facing a Retirement Income Crisis? Click the button below to access your copy now!
1ConsumerFinance.gov, CFPB Releases Making Ends Meet Survey, July 13, 2020
2TD Ameritrade, Road to Retirement Survey, January 2020