The real benefits to retirees of financial advice

For many, the market volatility of 2020 has been difficult to navigate. Some people only realised that they had too much exposure to risk in their investment portfolio after markets fell dramatically.

A survey conducted by YourLifeChoices and Challenger in the middle of the first wave of the Coronavirus pandemic in April 2020 considered just how retirees were coping with share market shocks to their finances. Retirees were more concerned about share market performance than usual. This was the highest rated concern, with 43% of retirees including it in their top three financial issues.

Effects of receiving financial advice on retirement confidence

With all the additional concerns of retirees currently, and thelimited ability to generate new savings after working, it is not surprising that retirees worry about their future finances. This is an area where retirees benefit from good financial advice. It’s not that advisers necessarily remove all the uncertainty. They can’t. But they can increase the confidence of retirees to manage their needs through the uncertainties of retirement. This was evident in two questions from thesurvey.

Retirees who had spoken to an adviser were more likely to be confident or very confident that they would be able to sustain their lifestyle for as long as they live. They were also much more likely to report being happy with their money for retirement. The higher level of happiness was not just reported by those with more money. Some of the largest differences in the impact of advice were again present in retirees with less than $200,000 in overall savings.

The improvement in happiness does show the power of a well advised retirement income plan across all wealth levels. Presumably, the advisers will have been able to provide constructive ideas for these retirees to put into place, increasing their confidence in managing retirement and providing the essential peace of mind that many retirees seek.

Summary

Managing your finances in retirement can be a real challenge and financial advisers can help find the best outcome for you and your circumstances. However, the largest benefit might not be through any financial advice specifically but rather the power of a well-developed plan. If a retiree has a comprehensive income plan to deal with retirement uncertainties, they are more likely to be more confident with their finances and happier with their personal situation.

If you need help please talk to your financial adviser.

Source: Challenger