Based on a recent survey by the Society of Actuaries, retirees and pre-retirees are starting 2025 with a lot of financial insecurity due to key challenges such as inflation, unexpected financial hits, caregiving, family, and technology.

A recent article in The Street via Retirement Daily shared the initial findings of the SOA’s biennial Retirement Risk Survey, which surveyed American retirees and pre-retirees age 45 to 80 across all income levels. Through this research, retirees don’t feel like they are as prepared for unexpected events that could impact their retirement strategy.

The SOA’s Retirement Risk Survey preliminary results align with AIP Marketing Alliance’s focus on “protection” when talking to clients and prospects, which our staff believes will carry over into this new year. Consumers are feeling the impacts of 2024’s economic turbulence and the understanding how these variables could delay or impact retirement (or already have).

Per The Street article, here are some of the key findings of this Retirement Risk Survey.

• Retirement Income: There are growing concerns about maintaining financial security in retirement. Savings and investments not keeping up with inflation is a top issue, with 78% of pre-retirees and 58% of retirees expressing concern.
• Unexpected Financial Hits: 20% of retirees and 35% of pre-retirees experienced a financial shock that resulted in a loss of more than 25% of assets. One out of five pre-retirees have run out of assets, had to downsize due to finances or were victims of fraud.
• Caregiving: 13% of male and female pre-retirees either currently provide care for or have provided care to others who are not their own minor children (e.g., parents, adult offspring, grandchildren, extended family). Meanwhile, 6% of male retirees and 9% of female retirees have done or are currently doing the same. When asked about the top impact of caregiving responsibilities, male and female pre-retirees (36% and 26% respectively) and female retirees (35%) cited emotional and/or physical toll, while male retirees (14%) cited long-term care planning.
• Family: Less than 10% of retirees and pre-retirees surveyed provide significant financial support to family members or anticipate receiving financial support from family. Also, 38% of pre-retirees feel unprepared to take on a family member’s medical emergency or health issue, while 27% of retirees expressed the same.
• Inflation: Rising costs are impacting respondents’ food and daily expenses (51% of pre-retirees and 35% of retirees), utilities (45% of pre-retirees and 29% of retirees), and lifestyle (44% of pre-retirees and 27% of retirees). This has led more pre-retirees to adjust savings strategies, particularly for individuals with annual income of less than $100,000.

“I’m concerned respondents might be overestimating their level of preparedness,” said Anna Rappaport, FSA, MAAA, past SOA President and current Chair of the SOA Committee on Post-Retirement Needs and Risks, per The Street article. “The costs and caregiving obligations connected to a medical emergency or health issue can be very high. Even though inflation rates have come down, many are still affected by high prices for housing and groceries.”

At this point, AIPMA wants to circle back to the “protection” philosophy and how 2025 should involve conversations with clients to protect their retirement years.

Some of the current annuity rates for MYGAs could lock in a guaranteed rate over five percent for three to five years for short-term planning. Other annuity options (fixed indexed annuities – FIAs, for example) have longer term and additional options (based on cap and/or participation rates, product, etc.), which could provide guaranteed lifetime income for multiple years during retirement. Some annuities also have hybrid long-term care options.

Let’s segue into long-term care (LTC) as more consumers are realizing how healthcare costs have escalated during the last decade. The current LTC national averages paints a potentially expensive picture for the next decade and beyond.

AIP Marketing Alliance recently shared some of these statistics in our blog during Long-Term Care Insurance Awareness Month in November. This article shares the 2024 Long-Term Care Consumer Study by OneAmerica Financial as well as some of the current LTC costs nationwide from the website, whatcarecosts.com. Take a few minutes to check out AIPMA’s blog from a few months ago if positioning LTC products with clients/prospects.

We also encourage you to start the protection conversation by scheduling a Life Insurance Policy Review (LIPR) with your clients and potential prospects. By reviewing their current situation, this appointment helps show your clients/prospects where they may have potential gaps in their life insurance planning. It also opens up further direction about their retirement strategy.

February also is #InsureYourLove month, which focuses on the importance and benefits of having life insurance – so the timing is perfect to contact clients, talk financial new year resolutions, and discuss potential options to protect their retirement years and loved ones.

Need some more assistance and ideas to start the protection conversation? Contact AIP Marketing Alliance’s Business Development team at (800) 783-5206 Press #2 or marketing@aipma.com. We’re here to help you and your downline agents to STRIVE in ’25 with the resources and support to help you grow your business! With AIPMA, the difference is personal!

For more than 40 years, AIP Marketing Alliance (AIPMA), an Integrity Company, serves as a premier life insurance and annuity distribution partner to provide full-service support to independent wholesalers, brokerages and agents from our Troy, Michigan office. NOT AFFILIATED WITH OR ENDORSED BY THE GOVERNMENT OR THE MEDICARE PROGRAM.

AIP Marketing Alliance is committed to STRIVE in ’25 as we support our independent insurance wholesalers and agents. Visit our blog on aipma.com to stay informed on these upcoming launches and learn why wholesalers nationwide choose AIPMA as their distributor for selling life insurance, annuities, long-term care insurance, final expense, and much more. Ask about our lead services, myAIP CRM platform with customizable recruiter portal, and online tools/resources designed to grow your business. The difference is personal.

AIP Marketing Alliance, an Integrity Company, has developed this electronic communication for informational and educational use only. Be advised, AIP Marketing Alliance, Inc. does not provide legal advice, tax advice, or guidance on issues involving securities laws, insurance laws nor securities or insurance regulations. This material should not be relied on as providing any such advice or guidance to either agents or retail consumers. Within this communication, AIPMA shares links for usage as information only. This content should not be interpreted as solicitation to purchase life insurance, annuities, or other products or as advice designed to meet your clients’ specific needs. Content involving fiduciary, tax, or legal advice should be directed to your legal, tax, and financial professionals for specific advice or product recommendations. AIPMA will not accept any legal liability resulting from any use of 3rd party material(s).