A new survey by the American College of Financial Services shows health care and Social Security are among the top concerns of investors; many of them are eyeing Washington warily.
“Coming out of a highly contested election season, it is no surprise that many retirees feel a bit wary about their retirement security,” observes David Littell, retirement income program co-director at The American College of Financial Services. “Over the next few weeks and months, we will get a clearer look at potential policy changes. At this moment, investors are feeling worried about what they cannot foresee.”
One positive finding is that advisers and clients are clearly communicating their concerns to one another. According to the research, advisers are “keenly aware of their clients’ moods and recognize that there are no ‘one size fits all’ retirement plans in the face of an unpredictable future.”
“When advisers were asked if they were more concerned about their clients’ retirement security post-election, more than half (53%) reported that the election results have increased their concerns, while 23% felt the election has had no impact,” the survey data shows. Just about one-quarter (24%) believe the election has improved the outlook for their clients’ retirement security. “Advisers report that clients’ leading concerns are focused on potential post-election changes to health care (27%) and Social Security (22%). “
NEXT: Markets are up, but so are client concerns
According to the American College of Financial Services polling, more than half of advisers have told their clients to stay the course with their current investment strategies, even amidst the recent market gains. Still, 40% of advisers suggest they are “taking risk off the table for their retired clients by buying income annuities.”
“Half of advisers (50%) said that they were rebalancing their retirement client investment mix to lock in gains or reduce risk,” the survey shows. “A very low percentage of advisers, at 5%, are encouraging their retired clients to invest more heavily in the market.”
Other findings suggest the majority of advisers believe greater market volatility is in store for 2017, while 77% note that any changes to retirement income plans due to increased market volatility will depend on individual client situations.
“Regardless of what is ahead during this new administration, the bottom line is clear,” Littell concludes. “Advisers need to take this opportunity to sit down, talk with their clients about their current retirement plan and reassure them they are on the right path for retirement.”
The full research report is available at www.TheAmericanCollege.edu.