Inflation and Financial Security are Top Concerns in Retirement

Read Full Bio

About Frank Gorshin

CLU
Frank J. Gorshin, CLU, has been a part of the life insurance and financial service field for over 30 years. After working as a manager for several large financial companies, he proudly began his own independent marketing organization in 2002. Gorshin Financial Group supports a team of 20 advisors with Life Insurance and Annuity products. In addition, he continues his consulting practice for retirement and income planning with over 200 clients.

Inflation has become a growing concern for many Americans, particularly regarding financial security in retirement. A recent survey reveals a significant divide between the perspectives of consumers and financial advisors on the future of inflation and the strategies to combat its effects.

Growing Concerns Among Consumers

According to a study conducted by a leading insurance company in collaboration with the Center for Retirement Research at Boston College, Americans are increasingly worried about how inflation will impact their financial stability during retirement. The research surveyed over 1,500 individuals aged between 55 and 85, as well as 400 financial professionals, uncovering a notable difference in outlooks between these groups.

The study found that a substantial portion of consumers, approximately 26 percent, believe that inflation rates will exceed 5 percent in the coming years. In contrast, only 8 percent of financial professionals share this view. This disparity highlights a significant communication gap and a potential lack of understanding or differing interpretations of economic trends between consumers and their advisors.

The Role of Financial Advisors

Financial advisors play a crucial role in helping clients navigate economic uncertainties, including inflation. The survey revealed that advisors are employing various strategies to protect their clients from the erosive effects of inflation on their retirement savings. Among these strategies, diversification emerged as the top recommendation.

Interestingly, the data showed a growing trend among advisors to increase clients’ exposure to annuities with guarantees. This approach, which gained traction significantly over the past few years, suggests a shift towards more secure and predictable income streams for retirees. About 42 percent of advisors now recommend annuities with guarantees, up from 32 percent in the previous years.

Impact of Advisor Guidance

The study highlighted the tangible benefits of professional financial advice in mitigating inflation’s impact. Consumers who received anti-inflation guidance from their advisors reportedly lost only 2 percent of their purchasing power due to rising prices over the past year. In contrast, those who did not seek such advice experienced an average loss of 4 percent in purchasing power.

Divergent Perceptions Among Retirees and Pre-Retirees

The survey also underscored differing perceptions of inflation’s impact between retirees and pre-retirees. While 41 percent of pre-retirees expressed concerns about inflation affecting their household finances, only 29 percent of retirees felt the same. This difference could be attributed to retirees having already adjusted their financial plans to account for inflation, whereas pre-retirees are still in the process of preparing for its potential effects.

Long-Term Implications

The Center for Retirement Research at Boston College emphasized the long-term implications of high inflation on financial security in retirement. Many households have taken short-term measures to cope with rising prices, such as tapping into their assets and reducing savings. While these actions provide immediate relief, they could lead to decreased consumption and financial strain in the future.

Inflation remains a critical concern for Americans approaching or already in retirement. The survey highlights the importance of proactive financial planning and the value of professional advice in safeguarding against inflation’s impact. As inflation continues to shape the economic landscape, both consumers and financial advisors must stay informed and adapt their strategies to ensure financial stability in retirement.

To secure your financial future amid rising inflation, it’s crucial to have a solid retirement plan. Contact a trusted financial advisor today to discuss strategies that may protect your retirement savings from the effects of inflation. Your advisor may provide personalized guidance to ensure you remain financially stable and confident in your retirement years.

Many people have learned about the power of using the Safe Money approach to reduce volatility. Our Safe Money Guide is in its 20th edition and is available for free.  

It is an Instant Download.  Here is a link to download our guide: 

Safe Money Guide – Annuity.com

About Frank Gorshin

Frank J. Gorshin, CLU, has been a part of the life insurance and financial service field for over 30 years. After working as a manager for several large financial companies, he proudly began his own independent marketing organization in 2002. Gorshin Financial Group supports a team of 20 advisors with Life Insurance and Annuity products. In addition, he continues his consulting practice for retirement and income planning with over 200 clients.

View The Best Annuity Rates Available Now

Annuities are a safe and reliable investment. They can transform your savings into a more predictable income. Speak with one of our qualified financial professionals today to find out how an annuity can offer you guaranteed monthly income for life.

Our unique system of “Pooled and Shared” articles by our authors, our outside contributors, and writing assistants provides efficiency, enhanced collaboration, and greater topic accessibility. This allows for a better utilization of content and productivity while delivering meaningful content to our readers.

Content in our posted articles is deemed to be accurate but topics, facts and laws can change. It is always a good idea to verify facts before making decisions. Always seek authorized and professional advice regarding financial decisions which includes investing, annuity purchases, tax planning, changes in a financial portfolio and retirement planning.

Share This Entry:

In This Article

Protect Your Retirement

Our 20th edition of The Safe Money Guide, the standard of the industry.

Recent Posts

Archives