Survey Says: Age Is Not Just a Number

John Diehl   |  Thu Apr 14 16:00:00 EDT 2016


No matter how hard we may want to resist it, all of us will continue to get older each and every day. As we age, and as our parents and children age in tandem, our financial considerations, plans and fears evolve as well.

Exacerbating the situation is the changing landscape of retirement—Social Security has undergone modifications, people are planning to work for a longer period of time and saving for retirement has all too often been relegated to the back burner in favor of other large ticket events. It’s also worth mentioning again that it is easy to underestimate how much we really need to save for retirement, given that life expectancy has increased over time and that the multi-generational household is on the rise.

Retirement should be an enjoyable time, but with all of these pressures, it can become something of a fear factor instead. Without really knowing the kinds of fears their clients have about their own and their parents’ aging, though, it can be difficult for financial advisors to know how to address what’s top of mind for investors. In response, we at Hartford Funds recently conducted a survey to find out what are the top financial concerns for Americans as they age, as well as what they worry about with regard to their aging parents. The results can go a long way in helping advisors better understand how to get through to their clients and hit on the topics that matter to them the most.

Here are a few of the key survey findings, along with my perspective on why—and how—advisors should take note:

40% of survey participants said that they are most worried about running out of money and becoming a financial burden to their children.

Longevity is a wonderful thing, but many of us may be shortchanging our own life expectancy. Perhaps we’re prepared for a ten-year retirement, but what we really get is a fifteen-year retirement. Life is unpredictable, and there really is no way to predict for how many years our retirement funds need to last. That being said, it is not productive or healthy behavior to worry over something that is unknown—a better tactic would be to prepare for the worst. Ask your clients if running out of money is something they think about, and then talk to them about how they could make changes to their spending and saving habits, as well as to their portfolio, to help them plan—rather than fear—for a longer than expected retirement.

42% of survey participants said that they are making strategic living arrangements in preparation for their own aging.

In our older age, we are likely to have more mobility restrictions and health problems. Stairs can become impossible, showers can become a hazard and driving can become frightening. Many people wind up moving, either to a more suitable home, a location that is closer to their children or into an aging care home. The question that financial advisors should be asking their clients, though, is what preparations they are actually making in this regard. Each of these relocation scenarios requires funds and should be accounted for in any financial plan. Talk through with them what kinds of costs to expect and how better to position themselves to shoulder the financial repercussions of adjusting their living arrangements in preparation for their own aging.

26% of respondents feel that it is most important for their parents to have a home they are physically able to maintain.

It’s not just our own retirement living arrangements that can be cause for concerns—it’s our parents’, too. When thinking about the safety and well-being of an aging parent, where and how they live has the potential to overwhelm and cause anxiety—Is my widowed mother receiving the medical attention she needs? If she lives alone, is she lonely and depressed? What if she gets hurt while home by herself? Does she have enough money to maintain her home, pay her bills and buy groceries? How is she getting to the grocery store, anyway? Is she cooking for herself and eating proper meals?

According to our survey, 32 percent of respondents stated that, to combat these kinds of fears, they are either moving closer to their parents or moving their parents closer to them. Much the same way that we need to be financially prepared to adjust our living arrangement, we may also need to prepare for aiding our parents as well. Know the parental circumstances of your clients—if they have aging parents still alive, whether they are planning to help them move, if they might begin caretaking for their parents, etc. Again, each possibility entails funds, and so helping to support or relocate aging parents should be built into the financial planning process.

14% of respondents say that they are initiating conversations with loved ones about their own intentions as they age; 12% say that they are initiating conversations with loved ones about their parents’ intentions as they age.

Despite all of the fears and anxieties that we have about our own aging and about our parents’ aging, the survey suggests that people just aren’t talking about these concerns. Having a dialogue around these kinds of issues is crucial—how can we help our elderly parents if we don’t know their plans? How can we expect our loved ones to be prepared for our aging plans if we don’t share them? There is quite a lot to think about when it comes to aging. If we have siblings, who will take in our parents, should the need arise? Will the other siblings contribute financially? For our own aging, how secure do we feel our finances are? What do we want our children to do if we can no longer maintain our own home? These kinds of conversations are the foundation for cultivating a thoughtful, organized financial plan and retirement budget. Ask your clients whether they are having these talks with loved ones, and have them invite appropriate family members to a meeting to have an honest, informed discussion regarding aging plans and finances.

Why does all of this matter? Twice as many investors value relationships with their financial advisors over performance, and the information gleaned from this survey can serve to help advisors strengthen their relationships with clients. Showing care and awareness for the fears of their clients, and then taking them through how they can address those fears, may also help advisors differentiate themselves and become more trusted by their clients. As such, financial advisors should heed these data points, bring them up with their clients and then talk their clients through what fears they may have and how together you can better prepare for their own and their parents’ aging. After all, there is more to aging—and to advising—than just numbers.

John Diehl

John Diehl  

Senior Vice President, Strategic Markets Hartford Funds

John Diehl is senior vice president of Strategic Markets for Hartford Funds. He and his team are responsible for engaging and educating financial advisors and their clients about current and emerging opportunities in the financial-services marketplace. These opportunities range from tactical strategies in areas such as retirement-income planning, investment planning, and charitable planning, to anticipating and preparing for long-term demographic and lifestyle changes. John also oversees Hartford Funds’ relationship with the Massachusetts Institute of Technology AgeLab.

John joined the company in 1988 and was promoted to assistant vice president in 1991 and vice president in 1997. He was named senior vice president in 2007, while he led the Retirement and Wealth Consulting Group, which was responsible for building awareness and knowledge of retirement challenges and the latest planning strategies to address them. In 2012, John was named Senior Vice President, Strategic Markets; in this role, he devotes his efforts to serving the needs of financial advisors and their clients.

John has been widely quoted in consumer and trade publications such as The Wall Street Journal, Financial Planning, and On Wall Street. He has also appeared as a featured guest on CNBC and Bloomberg Television to discuss his views on retirement-related topics.

John attended Moravian College in Bethlehem, Pennsylvania, where he earned a bachelor’s degree in economics. He has been a CERTIFIED FINANCIAL PLANNER™ (CFP®) since 1991. In addition, he holds the Chartered Financial Consultant (ChFC®) and Chartered Life Underwriter (CLU®) designations. He is also FINRA Series 6, 7, 63, and 26 registered and holds a life and variable insurance license.

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