Feeling Prepared for Retirement Increases With Professional Help

Workers who are planning for retirement with a financial adviser report feeling more prepared to manage several potential risks to their nest egg, according to a study from Allianz Life.

The Allianz Life 2022 Retirement Risk Readiness Study found that respondents working with an adviser feel more prepared to manage potential risks—concerning both retirement savings and retirement income sources—than those who have never worked with a financial professional.

“Those who are already working with a financial professional are feeling significantly more prepared to manage several potential risks to their retirement, including saving enough, having a plan for retirement income, and addressing the rising cost of living,” the survey states.

Among individuals working with a financial professional, 74% feel that they are prepared and saving enough in a retirement account, versus 51% among those who have never had the assistance of a financial professional. Additionally, 67% of respondents who work with a professional reported finding balance between saving for retirement and spending to enjoy life now, compared with 47% of those without financial adviser assistance, and 65% of workers who have had assistance from a professional feel prepared for taking income in retirement, against 52% for workers who have never worked with one.

Remaining potential risks followed the pattern. Individuals working with a financial professional were more likely to report having a plan to address the rising cost of living (60% vs. 40%), diversifying their retirement savings to protect their nest egg (59% vs. 29%), making investments less risky (57% vs. 25%) and researching expenses and risks associated with retirement (53% vs. 26%).

Among respondents who work with a financial professional, 49% said they feel prepared for purchasing a financial product that provides a guaranteed source of retirement income, against 15% of respondents who have never had the assistance of a financial professional.   

Kelly LaVigne, vice president of consumer insights at Allianz Life, explained that although many workers remain in a vulnerable spot financially, many have placed a premium on the guidance of a financial professional to reach their goals.

“The pandemic changed a lot of expectations around finances and creating a retirement strategy, so now is the right time for financial professionals to understand, adapt, and meet clients where they are,” she said in a release.

The study surveyed three categories of workers to gain distinct retirement perspectives: pre-retirees who are 10 years or more from retirement; near-retirees, workers within 10 years of retirement; and workers who are already retirees. Additional distinctions emerged between the groups.

Retirees are focused on having their financial professional:

• Maximize investment return: 56% vs. 38% of near-retirees and 43% of pre-retirees;
• Protect investments from market loss: 45% vs. 39% of near-retirees and 32% of pre-retirees; and
• Minimize tax burden: 43% vs. 36% of near-retirees and 31% of pre-retirees.

Near-retirees are most interested in getting help with:

• Maximizing their Social Security benefit in retirement: 34% vs. 27% of pre-retirees and 25% of retirees; and
• Making the best decisions about Medicare and health insurance: 30% vs. 23% of pre-retirees and 22% of retirees.

Pre-retirees are more likely than others to want a financial professional’s assistance in:

• Securing their children’s financial future: 35% vs. 23% of near-retirees and 13% of retirees;
• Balancing their budget to save for later while enjoying life now: 33% vs. 25% of near-retirees and 26% of retirees; and
• Paying down debt: 27% vs. 19% of near-retirees and 16% of retirees.

“Pre-retirees also expect a different level of engagement with their financial professional, in terms of both service and strategy,” says a release from Allianz.

For example, the study finds that pre-retirees expect their financial professional to be technically savvy and offer interactive tools that help understand finances (58% vs. 48% of near-retirees and 37% of retirees) and be flexible with meeting options, including virtual meetings (50% vs. 43% of near-retirees and 48% of retirees).

The Allianz Life results are from an online survey of respondents in February 2022 with a sample of 1,000 individuals age 25 and older in the contiguous U.S., with an annual household income of $50,000 and up for single individuals and $75,000 and up—or investable assets of $150,000—for married/partnered respondents.