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Study: Americans Changing Retirement Strategies Amid Recession Fears

Half of retirement savers have changed their investment behavior since 2020.

A 2022 Allied for Life Income Protected Retirement Income and Planning (PRIP) study of 2,025 participants aged between 45 and 75 revealed that 50% are more inclined to protect retirement income since the onset of Covid-19. Interestingly, 44% concur that financial advisors should present financial products to clients that provide guaranteed lifetime income in retirement.

Nearly 73% of respondents who work with a financial professional think their retirement savings and income sources will last throughout their lifetime, compared to 36% without a financial advisor.

This free quiz can match you with up to three vetted financial advisors who serve your area, each obligated to work in your best interest.

Older workers want to prioritize protecting investments more than growth likely because of market volatility, high inflation, interest rate hikes and rising energy prices. Fears of a full-blown recession have overshadowed 2022, although analysts project a moderate recession for a prolonged time.

What Is the Average Retirement Income in the U.S?

The median average retirement income for retirees 65 and older stood at $47,357, reports Annuity, citing the most recent U.S. Census Bureau data. Most rely on Social Security and annuities for a steady income stream in retirement but fail to understand fixed-income options lose value to inflation.

Furthermore, many are locked into a lower monthly income, because they tapped into Social Security earlier than needed.

In 2022, the maximum monthly benefits stood at $4,194 for those withdrawing at age 70 and $2,364 at age 62, the minimum withdrawal age. In reality, the average income for retired workers in August 2022 was $1,672.76. The average interest rates of annuities for a premium deposit of $100,000 varied between 6.54% and 7.78% in August 2022, which translates to an annual income range of $6,540 to $7,780, reports Investor’s Business Daily, citing data from Cannex Financial Exchanges.

How Can Financial Advisors Help Solve Retirement
Income Concerns?

Covid-19 was a wake-up call for Americans without a financial plan and decent retirement savings.

Many may have gone for DIY investing and lost more, while others may have sought financial advice from certified professionals and pivoted to a new portfolio design for future protection from market swings.

Fiduciary financial advisors can assess your finances, assets, liabilities, and retirement needs to revamp an existing financial plan or create a new one that works in your best interest. They can help with taxes, estate and retirement planning, career transition, debt management, monthly income, investment advice, and important life events, while helping to teach you how to keep emotions at bay and invest confidently.

A financial advisor could help improve your retirement income by helping you correctly time your Social Security withdrawal, recommending the best available annuities and exploring avenues to increase your contributions in traditional 401(k) and IRAs for a considerable monthly income in retirement. Furthermore, an investment advisor could recommend investing in premium assets like real estate or low-risk options, such as asset-backed debt to create additional income streams.

How to Find a Financial Advisor?

Unlike robo-advisors that let you quickly set up your account and link your investments to recommend trades and portfolio updates, finding an in-house financial advisor who could help prevent you from financial pitfalls could be a tedious job.

SmartAsset’s no-cost financial advisor matching tool can help take the time and stress out of finding an advisor, and successfully matches over 50,000 vetted fiduciary financial advisors with investors each month.

A short quiz matches you with up to three vetted financial advisors who serve your area. Each of the advisors on SmartAsset’s matching platforms are fiduciaries, obligated to work in your best interest.

SmartAsset can also help arrange introductory meetings for you to interview your advisor matches regarding their track record, fees, investment approach, specializations, services offered, minimum investable amount, mode of communication, and scope for gaining financial knowledge.

Financial Advisor Tips

  • Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

  • If you’re just starting to invest, working with a robo-advisor may be helpful. Robo-advisors offer portfolio management services just like traditional financial advisors, but they typically have lower fees and account minimums. These are the top 10 robo-advisors.

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