Unfamiliar retirement tools add to worries

PRNEWSWIRE - Despite retirement worries amid the COVID-19 pandemic, familiarity with common retirement planning tools remains low among Americans, the Center for a Secure Retirement concludes in its latest research.

Only about half of Americans polled in the research say they're familiar with long-term care insurance, annuities, or Medicare Advantage insurance, according results of a survey conducted by the Chicago-based center and Bankers Life.

Additionally, four in five respondents are worried about their retirement, amplifying a reported lack of familiarity with common retirement tools that could help them reach their retirement goals, says Scott Goldberg, president of the consumer division at CNO Financial Group.

The study by the Center for a Secure Retirement surveyed 2,050 U.S. adults ages 18 and older about their expectations for retirement amid the COVID-19 pandemic.

"In times of uncertainty, it's important that working Americans have a basic understanding of the various retirement planning options at their disposal," Goldberg says. "A moment of upheaval like that experienced amid COVID-19 - particularly felt by those reliant on employer-sponsored plans like a 401(k) - represents an opportunity to educate the next generations of retirees about their options."

The data also suggests declining faith in Social Security among younger adults. Of respondents aged 55 and older, more than three-quarters say they expect Social Security benefits to be part of their retirement funding plan, while barely one-third of those younger than 55 said the same. For the baby boomer generation - people aged 56 to 74 - 83% expect to rely at least partly on Social Security.

More than half of working adults say their retirement planning has taken a hit amid the COVID-19 pandemic, with 36% indicating as a top concern that they've lost money in the stock market and 36% also indicating as a top concern they've been forced to reprioritize short-term savings.

Those further from retirement have been hit harder, with nearly two-thirds of those aged 35 to 44 reporting an impact on their future retirement due to the pandemic, compared with just one-third of those 65 and older.

Findings show, however, as Americans get older, they become increasingly familiar with Medicare products, with 90% of those age 65 or older expressing familiarity with the national health insurance program, while only 66% of those ages 35 to 44 said the same.

Long-term care insurance and annuities are less familiar to respondents across age groups. Only 40% of those ages 18 to 34 said they were familiar with annuities as a retirement savings vehicle, compared with 51% of those ages 55 to 64. Long-term care insurance was familiar to 60% of respondents aged 35 to 44, compared with 58% of those aged 45 to 54 and 52% of those 55 to 64.

"As the survey shows, there is a pervasive feeling of uncertainty among pre-retirees amid the experience of the COVID-19 pandemic, with many concerned about not having enough money for retirement," says Goldberg. "It is important to understand how a diversified portfolio can help diminish the risk of financial loss in a volatile market and help with reaching long term financial goals."

The survey was conducted online May 29 to June 2 within the U.S. by The Harris Poll on behalf of Center for a Secure Retirement. It involved responses from 2,050 U.S. adults ages 18 and older.

Bankers Life, a national life and health insurance company that focuses on the insurance needs of Americans who are near or in retirement, is a part of Carmel, Indiana-based CNO Financial Group Inc.