Retirees and pre-retirees share concern over ability to manage assets amid budget risks;
Western & Southern Financial Group releases study of retirement income attitudes

Many current and future retirees doubt their ability to manage their investments throughout retirement. That's the finding of a new survey report on retirement income attitudes conducted by Western & Southern Financial Group (Western & Southern) in collaboration with LIMRA, a worldwide research, consulting and professional development organization serving the financial services industry.

Income Outcomes: A Retirement Planning Confidence Study found nearly half (47%) of retirees and pre-retirees either only slightly (30.5%) or not at all (16.7%) confident they can manage their own investments throughout retirement. Relative to other groups, significantly more female pre-retirees (56%) and low net worth respondents (55%) expressed little or no confidence, per the 988 participants ages 50 to 75 surveyed earlier this year.

"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. "Having access to the right products, resources and guidance takes on added importance as retirement nears and begins."

Regarding the top concerns in retirement, retiree and pre-retiree survey respondents cited the same top four but ranked them differently. For retirees, their foremost 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%).

"Sustaining one's desired retirement lifestyle requires a balancing act," said McGruder. "On one hand, it calls for producing ongoing income for ongoing expenses, both expected as well as unplanned. On the other hand, it demands protecting asset values from risks such as inflation, market volatility, increased healthcare spending and extended lifespan.

"However, despite the uncertainty voiced, the planning process itself provides optimism. Of those survey respondents with a formal written retirement plan, some 45% of pre-retirees and 56% of retirees are either very or extremely confident their plan will provide income that will last through retirement."

As for addressing income needs, McGruder added, "while fully eight in 10 of those surveyed believe income planning is necessary for retirement, only two-thirds agree that annuities can provide a protected lifetime income. Our role is to build greater understanding of an annuity's guaranteed benefits."

Key Study Findings

Retirement Confidence

• Almost half of the respondents (47%) are slightly or not at all confident that they can manage their own investments throughout retirement.
• Compared to other groups, significantly more female pre-retiree (56%) and low net worth (less than $250k) (55%) respondents report being slightly or not at all confident that they can manage their own investments throughout retirement.

Retirement Income Planning

• Having a formal, written retirement plan helps boost retirement confidence. Of those who have a formal, written retirement plan, over half (51%) are either very or extremely confident their plan will provide income that will last through retirement.
• The majority of those who have adjusted their retirement income plan cite cost of living, inflation and periodic budget review as the top three reasons for making changes.
• Pre-retirees are significantly less knowledgeable than retirees (47% vs. 41%) in their understanding of what retirement income planning entails.
• Conversely, pre-retirees are twice as concerned about retirement income planning as retirees (26% vs. 13% strongly agree, respectively).
• High net worth individuals are more than twice as knowledgeable of retirement income planning as their low net worth counterparts (57% vs. 24%).

Annuity Non-Owner Attitudes

• 65% of those who don't own an annuity have a neutral sentiment toward annuities.
• Annuity non-owners are also largely ambivalent regarding the pros and cons of annuities.
• The top three annuity company attributes annuity non-owners look for are financial strength, company reputation and financial professional recommendation.

Working with Financial Professionals

• Six in 10 respondents (61%) don't have a financial professional.
• Significantly more pre-retirees (33%) than retirees (13%) who lack a financial professional are seeking one. This is especially true for many male pre-retirees (39%) and low net worth pre-retirees (36%) as compared to other groups.
• The top two qualities a financial professional should possess are transparency (mentioned by 53% of respondents) and ethics (mentioned by 46%).
• Both pre-retirees and retirees rely on the same information sources for financial decisions: general financial websites (55%), financial professionals (52%) and spouse/partner/family/friends (43%).

"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."

ABOUT THE STUDY

Income Outcomes: A Retirement Planning Confidence Study, commissioned by Western & Southern Financial Group and conducted by LIMRA, drew from online research with 988 U.S. pre-retirees and retirees between ages 50 and 75 to achieve three aims:

• Understanding attitudes, perceptions, motivations and preferences regarding retirement income.
• Evaluating what influences engagement with financial professionals.
• Uncovering expectations of the retirement income planning process.

ABOUT WESTERN & SOUTHERN FINANCIAL GROUP

Founded in Cincinnati in 1888 as The Western and Southern Life Insurance Company, and celebrating 135 years this year, Western & Southern Financial Group, Inc., a Fortune 500 company, is the parent company of a group of diversified financial services businesses. Its assets owned ($70 billion) and managed ($35 billion) totaled $105 billion as of June 30, 2023. Western & Southern is one of the strongest life insurance groups in the world. Its seven life insurance subsidiaries (The Western and Southern Life Insurance Company, Western-Southern Life Assurance Company, Columbus Life Insurance Company, Gerber Life Insurance Company,1 Integrity Life Insurance Company, The Lafayette Life Insurance Company, and National Integrity Life Insurance Company) maintain very strong financial ratings. Other member companies include Eagle Realty Group, LLC; Fabric by Gerber Life; Fort Washington Investment Advisors, Inc.;2 Gerber Life Agency;3 IFS Financial Services, Inc.; Touchstone Advisors, Inc.;2 Touchstone Securities, Inc.;4 W&S Brokerage Services, Inc.;2,4 and W&S Financial Group Distributors, Inc.5 Western & Southern is the title sponsor of seven major community events every year, including the Western & Southern Open, a premier event in the U.S. Open Series played each August by the world's top-ranked professional male and female tennis players.

1 Gerber Life is a registered trademark. Used under license from Société des Produits Nestlé S.A. and Gerber Products Company.
2 A registered investment advisor.
3 In the State of California, Gerber Life Agency, LLC is known as and does business as Gerber Life Insurance Agency, LLC.
4 A registered broker-dealer and member FINRA/SIPC.
5 W&S Financial Group Distributors, Inc. (doing business as W&S Financial Insurance Services in CA).
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ABOUT LIMRA

Serving the industry since 1916, LIMRA offers industry knowledge, insights, connections, and solutions to help more than 700 member organizations navigate change with confidence. Visit LIMRA at LIMRA.com.

Annuity Alliance is not affiliated with The Western and Southern Life Insurance Company or LIMRA. This article is for informational and educational purposes only. It should not be used to make a buying decision. If you would like to speak with a financial professional, please use Annuity Alliance’s contact form.