2 MIN READ
Published July 10, 2024
A recent survey from the Nationwide Retirement Institute has revealed that over a quarter (26%) of retired investors are still paying off their mortgages, and exactly one-quarter are working to reduce their credit card debt. This data highlights the financial challenges many retirees face in the current economic climate.
The aging U.S. retirement population is growing rapidly, and inflation is making it increasingly difficult for retirees to manage their monthly expenses. According to the survey, 22% of older investors are worried about their ability to cover regular monthly bills.
"The picture of life after retirement has changed for many people as economic stressors continue to weigh on retired investors," said Mike Morrone, VP of Nationwide’s annuity business development division. "Now is the time for advisors and financial professionals to check in with their clients and help them remain calm, nimble, and informed in the face of continued economic headwinds, ensuring the plan they have in place continues to position them for a secure retirement."
The economic pressures have also led retirees to cut back on discretionary spending. The survey found that 39% of retired investors are reducing their entertainment expenses, and 34% are scaling back on leisure trips and vacations.
Additionally, more than one-in-five retired investors (22%) are increasing withdrawals from their retirement accounts, accelerating the "decumulation" phase after their careers have ended.
However, many retirees are taking steps to secure their financial future. The survey showed that 63% of retired investors have a strategy to protect against market risk, up from 54% the previous year. Furthermore, retirees are increasingly engaging in discussions about legacy planning, covering long-term care, funeral expenses, and the financial details of their estates with their intended heirs.
Financial advisors play a crucial role in these plans. "Advisors are recognizing and acknowledging investors’ desire to avoid making the wrong moves in retirement," Morrone added. "They can help clients feel more confident about their retirement plans by understanding their goals and anxieties and helping them protect their savings and plan for income they won’t outlive by reinforcing the value of different retirement solutions and products, like annuities."
As retirees navigate these economic challenges, the guidance of trusted advisors and careful financial planning remain essential for maintaining stability and security in their retirement years.