Retiring During A Time Of Uncertainty
Over the past few years, several crises such as the Russian invasion of Ukraine and Covid-19 pandemic have resulted in supply chain disruptions, heightened market volatility and alternating retirement plans.
While the pandemic has prompted some individuals to retire early and others to delay retirement plans, all retirees face the new challenge of generating income in a low-interest-rate-environment. Retirees typically employ a 60/40 investment strategy, which requires 60% of the portfolio’s assets to be invested in equity while the remaining 40% are invested in debt to generate steady income. However, lower interest rates and soaring inflation have caused industry experts to begin questioning common strategies and practices.
The Alliance for Lifetime Income recently released a Protected Retirement Income and Planning study, which surveyed nearly 2,000 investors between the ages of 45 and 75. According to the survey, nearly 85% of investors indicated that they are interested in owning an annuity that guarantees lifetime income or already own one. On the other hand, a corollary study of at least 500 financial professionals determined that only 18% believe that their clients are interested in annuities offering lifetime income. “If that gap continues to widen, financial professional are likely to find that clients will go elsewhere for advice,” said Jean Statler, CEO of the Alliance for Lifetime Income, a nonprofit consumer education group.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.
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