Article at a glance:
Consumers are bearing more retirement-related risk than they have at any time since the creation of the modern welfare state. Many employers have already shifted from defined-benefit to defined-contribution retirement schemes, and public retirement systems are facing an uncertain future in many countries. The change represents an opportunity for financial institutions, which can help consumers by offering products that generate income and manage the risks of retirement, including catastrophes and unexpected longevity. But these institutions must also retool their advisory forces to serve retirees and workers more appropriately.
The take-away
To make the most of the trend toward greater individual responsibility for retirement, financial institutions should shift their orientation from the accumulation of assets and toward offering advice, generating income, reducing risk, simplifying products, and improving internal collaboration so that they can better meet the needs of retirees.
This article includes the following exhibits:
- Exhibit 1: Willingness to seek financial advice by age—preretirees vs. retirees
- Exhibit 2: Forecast distribution of age groups, retirement assets in the United States
- Exhibit 3: Level of retirement anxiety by age, sex, and level of wealth