If there’s one thing economic uncertainty can foster it’s an increased sense of urgency to prepare for retirement. American Advisors Group recently published the findings of their survey, Moving Forward. It found
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respondents are more inclined to engage in professional financial planning and take concrete steps to help secure their economic future. Today we will examine some of the survey’s key findings. AAG’s Moving Forward survey was taken in the months of June and July 2021. One thousand individuals in the U.S. between the ages of 22 and 76 earning over $40,000 a year responded. 58% of respondents indicated they are increasingly mindful of how future events may impact them. That number would likely be higher had the survey been taken after the start of the Russia/Ukraine war and accelerating inflation. An overwhelming 91% of survey respondents saw value in financial products that provide a lifetime income. For this reason, Americans have purchased financial products such as guaranteed lifetime income annuities, or other investments with an income rider to provide an increased sense of income security. Of course one of the most overlooked means of accomplishing this is the federally-insured reverse mortgage’s tenure payment, which while not guaranteed for life, does provide a monthly payout as long as the borrower remains in the home and meets the conditions of the loan. The survey also reveals that 41% are more motivated to engage the services of a financial professional than they were before the COVID-19 pandemic. Of course, reverse mortgage professionals hope advisors will make their client’s home value part of the retirement discussion. Despite the survey being taken nine months ago, healthcare costs and inflation were cited as the top concern of 80% of respondents. Savings and debt elimination are nearly tied for top priorities with 66% stating they will prioritize saving for retirement and 65% prioritizing paying off their debts. Seeing debt elimination as one of the top responses is not surprising considering more consumers see the risk of carrying credit card debt while interest rates rise. One’s sense of optimism is often linked to the amount of time one feels they have to recover from a setback. The Moving Forward survey reflects the generational differences when it comes to quality of life in retirement with only 13% of baby boomers expressing optimism, versus nearly half of Millennials. Stuck in the middle are 26% of Gen-X’ers born between the years 1965 and 80 who see an optimistic finical future. Economic uncertainty often prioritizes survival over proactive retirement planning. However, what’s becoming clear is more individuals of all ages are becoming increasingly aware of the value of personal financial planning and saving. They may not know exactly how to go about securing a better financial future, but they’re undoubtedly more motivated to seek practical solutions. Resources: Survey Says::AAG’s Moving Forward Survey Findings
4 Comments
Thanks, Shannon, for giving us a brief look at a survey taken by (or for) the largest HECM lender in the country. Do you know who actually conducted the survey and if so, whether or not the surveyor created their own questions without constraint from the lender?
Some of the findings seem suspect.
As a Baby Boomer I find the retirement optimism of the younger generation in AAG’s 2021 survey at odds with other surveys. For example, according to other surveys, more of the younger generations believe that Social Security benefits will NOT even be there at their retirements. Many more do not believe that promised benefits will be nearly as high as those benefits are currently projected to be when the younger generations retire. Add to that a lower rate of retirement savings and fewer and fewer new defined benefit plan participants and you have to question what makes these younger generations so optimistic about their retirements; now that would have made the findings meaningful.
Jim,
Greenwald Research conducted the survey from June 17 – to July 2, 2021. It’s not specified how the questions were formed.
https://live.cloud.api.aig.com/life/connext-fdm/download/100AicF6FGkgO9MMYvefTIwGZD54RuKnzAM-fsSKnyp7kDwa-dqd9djCMe1JaRqeMGFcff8m3dYkDYr80ClqkGbmNg
Shannon,
Thank you.
You’re most welcome my friend.