A significant number of Americans are changing their retirement plans in response to the current economic climate. A recent New York Life survey found that more than 1 in 3 adults (35%) have delayed or intend to delay their retirement, citing insufficient savings (51%), inflation (46%) and the changing economic environment (32%) as primary reasons. In addition, 53% have revised their retirement strategy.
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Making changes to your retirement plan in response to inflation can help ensure you have sufficient funds to live the life you want when the time comes. Here are some ways to consider updating your plans to protect your future self.
In today’s economic environment, retirement planning must go beyond contributing to long-term reserves, like a 401(k) plan, said Matt Wion, head of retail annuities at New York Life.
“When identifying the vehicles best suited to support their broader financial strategies and goals, Americans should consider products that offer protection against market volatility and longevity risk, as well as an opportunity for portfolio growth,” he said.
These products can include annuities, protected retirement income solutions, principal protection products and managed payout solutions.
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To build lasting financial confidence, retirement strategies must account for inflation. That’s why Wion said to consider making annuities part of your retirement portfolio.
“Products like annuities offer guaranteed income, which, in addition to savings, can help retirees invest and spend more comfortably, providing confidence even in a high-inflation environment,” he said.
“As economic uncertainty continues to influence the financial landscape, many Americans are facing a growing ‘financial confidence gap’ — the difference between where people feel they are financially, and where they want to be,” Wion said. “When navigating this financial confidence gap, working with a financial professional can meaningfully improve confidence across key areas.”
The New York Life survey found that 87% of individuals who partnered with a financial advisor felt more confident in their ability to save, compared with less than half (49%) who did not have professional guidance.