73% of pre-retirees say learning “how I can manage my income and spending during retirement” is more important than “how I can save for retirement”, according to a recent survey by Life Stage Insights.

Growing economic tumult is leaving many clients wondering if they will be able to manage their income throughout retirement, according to recent studies. Many clients had become increasingly confident about their retirement prospects during the steady bull market of the last decade. But the economic impact of the COVID pandemic, rampant inflation, housing market uncertainty, and financial market volatility have converged to create a resounding wake-up call for clients nearing their retirement years.

Four out of five pre-retirees now say they are very worried about rising inflation and recession risk, according to a new survey from Alliance for Lifetime Income and CANNEX. 81% say they are worried inflation will significantly eat away at their retirement spending power. A study by Morning Consult revealed that inflation fears are particularly severe among pre-retirees and retirees, who have less time to regear financial plans to accommodate rising costs. Moreover, 79% of pre-retirees say they fear an impending recession will derail their retirement income plans, according to the Protected Retirement Income and Planning Study.

A recent Nationwide Retirement Institute Social Security Consumer Survey found two-thirds of pre-retirees feel anxious about their retirement income, a 10 percentage-point spike in anxiety compared to 2021 results.

Consequently, more and more clients are turning to their financial advisors for guidance on how they can manage income and spending during retirement. The Granum Center for Financial Security’s 2022 Consumer Survey found that retirement income planning was the top service sought after by clients, regardless of age or gender.

More clients now realize that retirement plans that address only wealth accumulation, rather than addressing both wealth accumulation and retirement income, could fail as clients navigate the uncertainties of retirement, these studies find. Guiding clients to manage income and spending throughout the different stages of retirement requires a deep understanding of clients’ retirement hopes, ambitions, worries, and lifestyle, including important parameters such as family needs, where clients want to live, how they might want to work, how they want to give back, and how they want to plan for health needs.

Indeed, it is this process that makes the role of the financial advisor now critically important, says David Baxter, CEO of Life Stage Insights. “Our system helps advisors deeply understand clients’ retirement goals and worries, and we are responding to these new survey insights by building additional retirement income planning tools,” says Baxter. “We are continuing to step up our offerings to empower advisors during this time of economic transition.”