As Long As They’re Healthy…

Among pre-retirees and retirees, the vast majority would rather live as long as they’re healthy, versus living as long as their money lasts, The Hartford and MIT AgeLab have found 

Eighty-percent of pre-retirees in the Hartford/MIT AgeLab survey said they would prefer to live as long as they’re healthy, while only 3% said they want to live as long as they have money.  Similar percentages were true for the retiree segment of the survey.

Moderating a panel discussion regarding these findings, Brian Murphy, executive vice president, individual life, The Hartford, said the survey revealed an over-arching optimism among both pre-retirees and retirees, despite economic uncertainty. When asked which older celebrity they would like to emulate the most in retirement, the most popular answer was Betty White, on account of her ability to laugh at herself. The second most common answer was Jimmy Carter, on account of his philanthropic work. Jack Welch and George Foreman were the least common responses, with respondents saying they “can’t seem to let go of work.” Helen Mirren and Steve Tyler were the other options.

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The October 2011 Age of Opportunity study, which measured the opinions and concerns of Americans both in and approaching retirement, found that most retirees are pleased with their life, and both pre-retirees and retirees have a positive attitude about retirement overall:

  • Retirees are more likely to say “I am happier now that I am retired” (77%) than those who have yet to retire are to say “I will be happier after I retire” (64%).
  • Other than wishing they could retire earlier (35%of pre-retirees), or could have retired earlier (42% of retirees), many recent and soon-to-be retirees see few negatives about retiring.
  • Twenty-six percent of those nearing retirement said they feel “hopeful” about retirement, while 27% of those who have recently retired say they feel “peaceful.”
  • Among those who did find something less than positive about the next phase of their lives, dealing with medical or health issues was cited most often (21% for both pre-retirees and retirees).
  • Among retirees, the more affluent are twice as likely as others to cite giving up a fulfilling career as a negative to retirement.

The study surveyed people who are within 10 years of retiring versus those who have retired within the last 10 years, and attempted to answer the question, “Does the reality of retirement match expectations?”

Most pre-retirees and retirees cite health or medical issues as the thing they worry most about impacting their retirement. Other health-related findings include:

If they could change one aspect of retirement, retirees say they would have saved more money or been better prepared financially (32%), but they also wish they’d paid more attention to the importance of health issues (13%).

Retirement-age Americans see themselves living a very long time. Many expect to make it into their 90s (29% of pre-retirees, 35% of retirees).

Although many retirees (48%) and most pre-retirees (63%) say their spouse is the person most likely to care for them if they become chronically ill, few (11% of pre-retirees and 10% of retirees) say their top concern is caring for a spouse or family member impacting their retirement.

When it comes to planning, both pre-retirees and retirees said a milestone birthday (19% of pre-retirees, 14% of retirees) or the realization that they are within 10 years of retiring (15% of pre-retirees, 11% of retirees) were the two most common triggers for serious financial planning. It also seems that early planning plays off: more affluent retirees–those with $250,000 or more of investable assets–are twice as likely to say they began serious financial planning when they got their first job.

The study also found that retirees and pre-retirees share values of what makes for a comfortable lifestyle. Both groups say they would be willing to give up some “extras” to help make ends meet in retirement, including moving to a more modest home (14% of retirees and 21% of pre-retirees), driving a less-expensive car (15% and 18%, respectively), or shopping less (17% for both). They were less willing to give up dining out, entertainment and recreational pursuits. Those who are more affluent are even more likely to “trade down” a home or car to preserve other aspects of their lifestyle.

One finding of the survey that surprised the panelists, including Jodi Olshevski, a gerontologist and head of The Hartford Advance 50 Team, was that very few respondents think about caregiving and the likelihood they will have to care for someone, either their spouse or parent. Olshevski said it is critical for families to have multi-generational conversations about where the financing for long-term care will come from.

At which point, John Diehl, retirement and investment specialist at The Hartford, said people often have trouble translating assets into a “purpose.”  He advises clients to create buckets to assign certain assets to certain needs – one for long-term care, another for college-savings, or living expenses – he said every retiree’s situation will be different, which is why working with a financial adviser is critical. The majority of people in the survey (53%) agrees with Diehl, and said their primary source of information is from a financial adviser.  

For more information about The Hartford/MIT AgeLab Age of Opportunity study, visit TheHartford.com/retirementstudy.

 

Winning Small-Business Clients

Securian Financial found that small-business owners (SBOs) can cite many reasons to use a financial adviser, yet only half employ one.   

In a paper titled, “Small but mighty: Growing opportunities for financial advisors and small business owners,” Securian Financial Group highlights survey results of small-business owners (SBOs). For many financial advisers, SBOs are highly desirable when building an advisory business because of the many financial services they need and use, yet they are a difficult market to target.

“Our research shows small-business owners have many financial concerns, but only half work with financial advisers,” said Kerry Geurkink, director, Annuity Marketing, Securian Financial Group, Inc. “And even then they work with advisers more on personal finance than business-related issues.”

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The online survey of 435 SBOs across the U.S. shows their top financial concerns include cost control, profitability, building wealth, financial security for their families and rising health care costs. The percentage of SBOs who want outside assistance with these concerns is much larger than the percentage who actually seek and use it. In certain circumstances, such as business succession planning, personal finance, asset management and employee benefits, seeking financial advice is much more common.

Securian found recommendations from family members, business acquaintances, and other financial professionals provide the best methods to win the business of an SBO. Networking with bankers, accountants and attorneys is also important.

“Once that first meeting is scheduled, the adviser must demonstrate expertise in running a small business,” say Geurkink. “That part should come easily since financial advisers themselves are small business owners. Above all, advisers must prove that assistance from a financial consultant is an investment rather than an expense.”

Securian said it is planning to use the research to develop a “Small But Mighty” campaign that gives advisers a step-by-step approach to building their small-business clientele.

The SBOs included in the survey met the following requirements:

  • Private company ownership, sole or shared
  • At least 50% responsibility company financial decisions
  • At least 50% responsibility for household financial decisions
  • For-profit company not in marketing, market research or financial planning
  • Three to 250 employees
  • Minimum of one year as owner

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