The Merrill Lynch study found that today’s retirees expect to live longer and work longer than earlier generations, and are looking for guidance in what is uncharted territory.
Fifty-two percent of the people in the survey expected to provide their adult children with some form of ongoing support; 35% of respondents expected to give some support to their grandchildren, 16% to a parent or parent-in-law and 10% to a sibling or sibling-in-law.
Asked what was important to pass on to future generations, 74% of respondents said their top priorities were values and life lessons. Passing on financial and real-estate assets was a priority for 32%.
Serious health problems were a major concern for 72% of respondents, with 60% saying they did not want to be a burden on their family, while 47% were worried about running out of money to live comfortably. Along with this, health care expenses were the No. 1 financial worry for retirement for 52% of respondents with investable assets above $250,000 and 37% of less affluent respondents.
A popular belief has it that people today are delaying retirement, but the survey found that 59% of men and 57% of women had retired early. For those who retired early, 34% stated the main reason was a personal health problem, 27% retired early because they had enough money to retire, and 24% had lost their job.
An interesting finding is that only a third of large companies currently offer health benefits to retirees versus two-thirds 25 years ago. As a result, retirees are looking for advice about how to protect against retirement health-care costs, with 75% of respondents saying they needed help in sorting through health care and long-term care options. Close behind, 71% wanted help to understand Social Security or employer pensions.
So, let’s put this all in perspective. What the survey points out is that pre- and post-retirees continue to need professional advice to make appropriate decisions. Prior to age 65, this means understanding the needs for disability insurance, life insurance and long-term care insurance.
After 65, most disability insurance is no longer available, but the need for life insurance to replace lost income continues, as does the need to plan for health care for debilitating illnesses, illnesses which may require care in the home or in a facility.
Some 10,000 people per day reach the age of 65 and this number will continue for the next 17 years. Many of these people will have longevity risk—the risk of outliving their money. Now is the time to plan using appropriate techniques and products to minimize this risk.
Talk to your agent or professional advisor today.