The nation is facing a retirement crisis
, but advisors can help by teaching their clients saving and investment strategies.
Households of working Americans may face as much as a 28 percent drop in income in retirement, while 4 in 10 retirees are reporting they don’t have enough money, according to a new Fidelity investments analysis. In other words, many Americans are heading toward a retirement where their standard of living will decrease significantly.
Fidelity’s analysis says there are five ways people can improve their monthly income in retirement:
1. Adjusting their asset allocation:
Nearly a quarter of Americans are invested too conservatively — based on their current age and planned retirement date — and are losing out on the long-term potential of stocks, Fidelity says.
2. Increased savings:
Many Americans are not fully benefiting from the tax advantages/deferred savings potential of their workplace or individual retirement accounts. Fidelity says this is especially important for younger investors.
3. Adjusting retirement date:
The traditional retirement age is 65, but delaying retirement can help preserve assets and give investors a better chance of not outliving their income in retirement.
4. Annuitizing retirement assets:
Annuities can be important tools for ensuring savings last through retirement, according to Fidelity.
5. Tapping into home equity:
Home equity can be leveraged through downsizing.
Do you agree with these five steps? Are there any additional strategies you share with your clients
? How many of your clients are concerned about outliving their retirement income?