More than a quarter (26%) of retired investors are still paying off their mortgage, and just a quarter of that same group are still paying off their credit card debt, according to a new survey from the National Association of Retired Persons.
America's retired population is aging at a rapid rate and facing crippling inflation, with the survey finding that 22% of older investors are worried about being able to afford a typical monthly payment.
“As financial stressors continue to weigh on retirement investors, the picture of retirement is shifting for many,” said Mike Morrone, vice president of annuities business development at Nationwide. “Now is the time for advisors and financial professionals to reach out to their clients to help them stay calm, agile and informed in the face of continued economic headwinds, and ensure the plans they have in place continue to provide the foundation for a secure retirement.”
Financial constraints have caused this generation to cut back on some of the things they wanted to do in retirement, like leisure travel: 39% of retirement investors surveyed said they were spending less on entertainment, and 34% said they were cutting back on leisure travel, vacations, etc.
More than one in five retired investors (22%) are also withdrawing more money from their retirement accounts, accelerating the “drawback” that occurs after careers end.
But these investors are also taking further steps to bolster their retirement security: 63% of investors surveyed have some strategy in place to protect themselves against market risk, up from 54% a year ago.
Increasingly, retired investors are proactively engaging in conversations with trusted advisors and loved ones about estate planning, including long-term care, funeral expenses, and the financial details of any estate they plan to name as heirs.
Financial advisors are also placing more emphasis on these plans, according to the survey results.
“Advisors know and acknowledge investors' desire to avoid making mistakes in retirement,” Morrone added. “By understanding their clients' goals and fears and highlighting the value of different retirement solutions and products, such as annuities, advisors can help clients feel confident in their retirement planning.”