Employees are devoting more of their attention to retirement planning, according to a recent report.
Financial Finesse, a financial education company, reported that about one-third of the questions its advisors received were about retirement planning during the second quarter of 2012, compared to one-quarter the year before. The percentage decreased further when looking back at 2010 and 2009, according to the business. This trend was noticeable across different age and income groups.
Notably, the attitude workers have seems to be shifting, the report indicated. More of them are taking a proactive stance, trying to plan ahead rather than remaining inactive until a crisis occurs and forces them to pay attention to the issue. This change in approach has also been progressive in recent years.
This attentiveness may be having some positive effects on employees' retirement confidence, with more of them saying they are on track to retire with sufficient savings. Still, the majority do not have a clear picture of their situation, the report indicates, having never conducted a retirement projection or taken a risk tolerance questionnaire to evaluate their circumstances and determine how to allocate their assets.
Annuities receiving attention as retirement planning tool
In their efforts to secure their retirement, many employees are looking at annuities and other tools. Most of those who consider annuities want to use them to supplement Social Security or pension income, according to research by LIMRA. This is particularly true for older individuals, while younger annuity buyers are more concerned with accumulating assets. Concerns that people may outlive their assets have been spreading among all age groups.
Employee benefits may include retirement assistance, depending on the employer, but retirees are finding that their savings can be stretched or exhausted as lifespans have grown longer. At the same time, aging tends to mean higher medical costs, which can be another source of concern.
"Knowing they will have sufficient assets and income in retirement continues to concern consumers," said Joseph Montminy, LIMRA assistant vice president, annuity research. "But the recent economic crisis and continued market volatility has made guaranteed income more valuable to consumers."
Annuity buyers are also paying more attention to the financial strength of the entity selling the annuity. The recession has made many adopt a more serious outlook on financial matters in general, but this is particularly true with regard to retirement planning.
