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About All That Scary Retirement Data

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Some people are suspicious of reports about the looming financial concerns of near-retirees and those who are actually retired. They complain that the data comes from, or is sponsored by, the insurance and financial service industry, and so is tainted by partiality.

Some believe the industry has cooked up the reports just to scare people into buying retirement products.

But what about data from an independent source like Gallup? The nationally-known public pollster just released results of its annual Economy and Personal Finance poll, and the findings corroborate those of the “industry” studies.

For instance, Gallup found that a firm majority of Americans (59 percent) are “very” or “moderately” worried about not having enough money for retirement.

That worry, which topped eight other financial matters, has ranked in first place every single year of the study since 2001, when 53 percent of Americans gave the same answer. Middle-aged folks (30 to 64) were especially concerned, with about 70 percent naming this worry as tops this year.

In other words, Gallup research has found having enough money to retire to be a persistent issue for a huge swath of Americans nationwide.

Research findings from the nonprofit Society of Actuaries (SOA) resonate with that. A 2013 SOA study found that pre-retirees and retirees both put the ability to pay bills and the accumulation of enough money to last through retirement as the top two factors affecting their decision to retire. That’s according to a presentation by Carol Bogosian of CAB Consulting and Mathew Greenwald of Mathew Greenwald & Associates at the recent Retirement Industry Conference in Chicago.

Yes, the SOA is an “industry” trade group of professionals, many of whom serve insurance companies. But actuaries also provide risk assessment services to government, pensions, investment firms, a variety of businesses in other industries, and others, so the scope of SOA research is broad and not skewed toward particular sales initiatives.

The significance of these particular surveys is that they come from independent or quasi-independent sources, and they sampled the views of consumers (i.e., not insurance and financial experts commenting on what they think consumers are worried about). The correlation in the findings suggests there is indeed a major retirement challenge facing the country.

Insurance and financial advisors probably will always encounter skeptics who doubt the data, regardless of the source or the accompanying commentary. But it still behooves the advisor to provide the information, in the hopes that awareness might gradually sink in.

As Gallup put it in its report, “For a country that now has a life expectancy at birth of 78.7 years, retirement savings for post-work years is considered a matter of national importance.”

Yeah, that message could be interpreted as scary. But failure to make the point could also be considered as socially and financially irresponsible — with seriously scary consequences.

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Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Connect with Linda →

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