We’ve written before about “longevity literacy” — here, here, and here — the need to better understand longevity and your own potential lifespan, and factor that into your financial planning.
But how does your financial adviser feel about it?
A new survey, reported here, suggests that financial advisers do not feel their clients adequately understand the issues, or are adequately prepared for retirement. Note the word – “retirement” – meaning the “traditional” concept of stopping work at 65. If you’re not ready for that, how much more serious is it if you live much longer? The survey also touches on post-retirement and “unretirement,” both of which will be familiar to SuperAgers.
First, some disconnects about retirement itself.
64% of retirees and near-retirees declared themselves “ready for retirement.” But only 40% of advisers thought their clients were ready.
It gets worse.
44% of near-retirees and 50% of retirees said they knew enough about Social Security to be prepared for retirement. But only 11% of advisers agreed.
About a third of near-retirees and nearly half of retirees thought they knew enough about Medicare planning. But only 8% of advisers agreed.
If these disparities exist on trued-and-true models that have been around forever, what about new ground? 65 is no longer the automatic age of retirement (if retirement even exists as a concept) and there are many new financial concerns based on increased longevity? How do these factor in? Were there any signs of the SuperAging mentality?
Encouragingly, yes.
Respondents were evenly divided as to whether they had retired sooner than expected (37%) or later than expected (39%), but “a sizable number of respondent decided to ‘unretire’ and return to work.” Interestingly, 83% said they returned by choice, not necessity.
As expected (because we’ve looked at many surveys of this type), the estimates of how much money it would take for an acceptable retirement nest egg varied widely. Near-retirees thought they’d need $1.6 million and retirees thought they would need $1.1 million. But as we’ve reported here, some think more than $4 million is needed.
How to achieve it? A small majority of near-retirees “indicated that they prefer a menu of fund options. as opposed to a professionally managed account or target date fund.” This will put more pressure on financial advisers, of course, who are likelier to face much more demanding clients ready to ask more penetrating questions. We’ve covered that, too, of course — in our book, we lay out a questionnaire to ask your financial adviser that may lead to you firing him/her — and we’ll keep bringing you more updates and ideas on what is sure to be a very dynamic part of the SuperAging mix.