Broadcast Retirement Network’s Jeffrey Snyder discusses the top retirement concerns with the Society of Actuaries’ Anna M. Rappoport, FSA.
Jeffrey Snyder, Broadcast Retirement Network
Joining me now, Anna Rappaport with the Society of Actuaries. Anna, so great to see you. Thanks for joining us this morning.
Thank you. And I’m very excited to talk to you because we’re going to be talking about the risk survey. But in talking with you, this survey has been conducted for over 20 years.
I bet you have seen a lot of changes in how people think about retirement in the 20 years.
Anna M. Rappoport, FSA, Society of Actuaries
We have, we’ve seen a lot of things that have changed and a lot of things that have not changed. And of course, the retirement system has changed with a big shift away from DB and more DC, a lot of dependence in Social Security. The whole time, some of the key things we found the whole time are that pre-retirees are more concerned about risks than retirees.
They seem to have settled down. We’ve also found that people plan to retire at a certain age, but very often they retire earlier. And those things don’t change at all.
Jeffrey Snyder, Broadcast Retirement Network
So, you know, and what’s interesting, Anna, I don’t want to get sidetracked from the survey, is that, you know, the world has kind of shifted to DC, to 401k type programs. But now we’re talking about things like retirement income, which I think is right in the Society of Actuaries wheelhouse. I mean, you all have been doing so much work around income in retirement with defined benefit plans.
So that’s something that has changed a little bit, but just in a different way.
Anna M. Rappoport, FSA, Society of Actuaries
Well, what actually the start of the survey is related to that shift. We found in the 1990s, around 1995, we came to realize that all of the focus on retirement savings was about getting the money, not using the money. And we started an effort there to focus on how the money is used in retirement.
And subsequent to that, we focused on what changes during retirement. And I spend a lot of my time today on very late in life issues. But in focusing on that, we began to focus on what’s the best way to use the money after retirement.
The survey grew out of that focus because we found out we knew what advisors thought. We knew what we thought as professionals, but we didn’t know what people thought. And surprise, we didn’t always, not knowing what people thought, we didn’t understand.
And a lot of what we have learned since then has shaped the way we think about retirement issues and what should be included in planning.
Jeffrey Snyder, Broadcast Retirement Network
So, Anna, do you think based on some of the survey results, both before and this particular survey, that people have a better, I’m talking about regular mom and pop Americana, that they have a better understanding of retirement, that they understand their needs? And how does that compare to when you first started the survey?
Anna M. Rappoport, FSA, Society of Actuaries
Sadly, there’s an awful lot that they don’t understand, but you can really think about people in different tiers. The people who have a lot of money, a lot of them do understand, do a good job of planning, understand a lot, even other things they may leave out. The people who have middle amounts of money, one of the things we found out along the way is that most of their money, in many cases, is in their house.
And the planning didn’t think about that adequately. We focused on that, and that’s something we’re still focusing on today. And people with little money, they didn’t have much understanding of retirement planning, but retirement planning wasn’t really relevant for them until they stabilized.
If you’re trying to pay off student loan debt, or worse still, if you’re trying to pay the this week and buy drugs for your children, and you’re scrambling to meet budget-to-budget, retirement planning is not relevant. What’s relevant there is getting you stabilized so you can save and retirement plan. That hasn’t really changed.
And the financial fragility remains a major issue today. And in fact, for some people, it’s getting worse rather than better. Financial wellness programs are helping to deal with that.
And much of the focus has shifted from retirement planning to more general financial planning and financial wellness programs. Within the framework of those who plan, a problem that has not gone away that we’ve uncovered in the survey and various focus groups, and I should say the Society of Actuaries in its consumer research program, the post-retirement risk survey, which looks at pre-retirees and retirees, has been the foundation for over 20 years. But we are also now doing a generation survey, and we’re about to do the third round of that.
And we’ve done various focus groups to help us, one, understand, and two, do a better job on the survey. So that consumer education program is broad, and I’ve been involved in all of it. So I have a pretty good understanding.
But the biggest problem there, and that has not gone away, is that people, there are a lot of people who are short-term. They’re like, oh, I can pay my bills for the next three years or two years or sometimes one year. I’m okay.
They’re not like, oh, retirement, I might live till 95 or 100 or at least 80, and I need to plan for the long term. So that’s, there are a lot of issues that haven’t changed a bit. There also are some cultural groups where retirement planning is not the system.
The system is the parents take care of the children and the grandchildren, and the children take care of the parents and the grandparents. And that’s the certain ethnic groups. So there’s a lot more to this than you start out working, and you got to save, and if you save that money, you’ll have money for retirement.
It’s a lot more complicated than that. And the survey has tended to do that. We have, I said we had about 20 years, over 20 years of research.
We also have some summary reports. One of them is the journey through retirement, which takes people through before they retire, they retire up to about age 85, and now we’re working on the even longer.
Jeffrey Snyder, Broadcast Retirement Network
And if I could just jump in, I think as an industry, we’ve tried to educate people, but you can’t educate for experience, and everyone is different. You’re different, I’m different. People, everyone in America is different, and so they have different experiences.
How does technology, like artificial intelligence, you mentioned financial wellness programs, is that, and they may be in their infancy. AI deployment may be in its infancy in this respect. But can that help bridge the gap, or are we always going to have the challenges you’re talking about, which is the volatility, the concern about paying the bills for so many of our fellow citizens?
Anna M. Rappoport, FSA, Society of Actuaries
Okay, I think that AI has a definite place and technology has a definite place. It’s not going to wipe out the problems. And I want to say that in this year’s survey, and this is, we’re at 12 now in terms of the number of surveys that we’ve done.
And in this survey, we’ve had technology as a special topic for the first time, which is interesting. The surveys, by the way, have some basic questions that are in all the surveys, some areas of focus that are in some of the surveys, because we’re trying for this not to be the same thing over and over again 12 times. But our entire program of research and consumer education, we try to build layers so that you get new stuff.
You get new stuff for each, out of each thing you do. And the summary reports bring you up to where you are. So we have, we’ve got this journey through retirement is the one that I particularly recommend.
And these are all downloadable from the Society of Actuaries website. The last survey, the 2024 survey, the one that the report will be coming out very shortly, that survey has three new topics in it. One on technology and AI, one on family, and one on inflation.
And it repeats the topics on the basic things. Watch for that survey. The technology material is particularly significant today.
Jeffrey Snyder, Broadcast Retirement Network
Well, Anna, we’re going to have to leave it there. Thanks so much for joining us. And look, we look forward to having you back on the program again very soon.
Anna M. Rappoport, FSA, Society of Actuaries
Thank you very much. And I’ll be happy to join you again.