When people reach retirement — or even when they simply are close to that stage of their lives — one fear looms especially large, today’s financial advisers report.
An overwhelming percentage of advisers — 79% — say clients who are in or near retirement worry about outliving their money in retirement, according to the first-ever Allianz Life RIA Retirement Risk Review Study.
Advisers appear to be listening to their clients’ worries, with 88% of financial pros agreeing that it is more important to effectively manage risk in their clients’ portfolios than to achieve the highest possible gains.
That philosophy holds true even though advisers have significant concerns that their clients have not saved enough money to ensure a financially secure retirement. In the survey, 59% of advisers said they believe clients need more money but are too close to their golden years to take the risks of investing in high-risk/high-reward financial products.
In a press release, Heather Kelly, senior vice president of Advisory and Strategic Accounts at Allianz Life, says:
“Financial advisors are grappling with a difficult challenge. First and foremost, their priority is to protect their clients’ assets, however, advisors also need to ensure clients are generating enough income to enjoy their golden years without financial worries. This dual mandate has only become more complex in today’s historic low-interest-rate environment.”
The advisers in the study said the greatest investment portfolio risks among those who are 10 or more years away from retirement are:
- High-equity valuations (36%)
- Taxes (31%)
- Inflation (30%)
Meanwhile, the greatest portfolio risks to those in or nearing retirement are:
- Longevity risk (47%)
- Low interest rates (44%)
How to build a secure retirement
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