Economic uncertainty has changed retirement expectations, causing many Americans to scrap retirement plans
The rising cost of living has prompted clients to rethink or redefine their retirement planning strategies, 48% advisors say in a recent survey.
Advisors who responded to Nationwide’s ninth annual Advisor Authority survey say clients trying to meet financial commitments in retirement are taking non-traditional approaches, which in some cases could lead to adverse outcomes.
According to Nationwide, 34% of advisors say their clients are drawing more funds from their retirement accounts to meet financial commitments, 23% say their clients are liquidating assets, and 16% say their clients are moving in with adult children.
To protect client assets from market risk, advisors are using annuities (79%), diversification and non-correlated assets (77%) and liquid alternatives, such as mutual bonds or ETFs (58%).
Among investors surveyed, 61% say their expectations for retirement have changed significantly in the last five years, and nearly half say their dreams for retirement have been delayed, altered or canceled as a result of the economic conditions during that period.
Just 38% of investors believe in having a retirement savings target, or a specific savings goal for retirement. For those who have a figure in mind, 42% of investors believe they need between $1 million and $2 million to retire, while 18% believe they need more than $2 million saved to comfortably retire.
