It’s no surprise that people are growing increasingly wary about retirement. A survey released last week by Unum confirms that more people are postponing retirement and that they are not financially secure about the commitment. A real opportunity for advisers lies in the ambitions of Gen X and Gen Y Americans, who aren’t planning on postponing retirement — yet.
Unum’s results show that 40% of people say they’re postponing retirement altogether and 36% don’t feel financially secure. The survey of 1,890 people also shows that respondents age 55 and older “expect to retire after their 70th birthday,” according to an Unum company statement, while respondents age 18 – 34 say they expect to retire earlier than their older counterparts at age 65.
Another poll conducted earlier this year by the Employee Benefit Research Institute showed that only 66% of respondents had saved for their retirement in some way. This is alarming to industry insiders. “Advisers have got to become strong advocates for plan design,” says Greg Burrows, senior vice president of retirement and investor services at The Principal. “We have data that shows that 82% of employees will stay [in a 401(k)] with the auto-escalate.”
In other words, people can be nudged into saving for their retirement, and it’s for their own good. Burrows urges creative plan design packaging on the part of advisers and says it can only help employees of all ages. “I don’t think anyone is saving more than they should be for retirement,” he says.
He adds that re-enrolling people who had opted out is important to plan design too. The findings certainly support the theory that people are simply not saving enough for retirement. However, there’s hope. Unum’s report shows that “77% of employees who rate their benefits package as excellent or very good say they are financially secure.”
