Most Americans are unprepared for early retirement: Study

Becker Retirement Group Owner Arwen Becker joins Yahoo Finance’s Seana Smith to discuss how Americans can protect their future nest eggs amid market volatility due to the coroanvirus.

Video Transcript

SEANA SMITH: Retirement in the age of coronavirus is not going to be easy, and the outbreak is destroying many Americans' retirement dreams or altering them just a little bit. We had a new study by Allianz Life Insurance. They came out with 65% of non-retirees think that it is likely that they will work at least part time in retirement. And how this compares to what's happening today, only 7% of retirees are currently working at least part time, as it stands at this point.

So here to talk more about this is Arwen Becker, owner of Becker Retirement Group. And Arwen, thanks for joining us this afternoon. We talk about how-- coronavirus outbreak, how it's impacting retirement plans, how it could be changing retirement plans. How do you think it's altered some Americans' plans on their timing for a retirement over the last couple of weeks?

ARWEN BECKER: Well, it honestly depends on how prepared they were. I mean, really, when you look back in time-- 2008, 2009-- that altered a lot of people's plans, too. So it really come down to, what was the planning leading up to it? Because there's always unknown, especially with retirement. You don't know if you're going to possibly lose a job right before you-- or you know, 62 or 63, something like that. Or there is going to be a black swan event, something that we didn't expect-- coronavirus. Obviously, I didn't expect that for my company.

So it really depends on what the preparation was leading up to it. So certainly, people who were very, you know, moderate to aggressively positioned, they're going to have a much more broad impact on their retirement, at least in that moment, than versus somebody who maybe had already been transitioning quite a bit of their assets into a more low-risk or no-risk position. So really, it does depend, truly.

SEANA SMITH: You know, when you talk about the importance of positioning and setting yourself up for success, how can people manage their retirement accounts more effectively at this point?

ARWEN BECKER: Well, you know, honestly, at this point, it's never been about timing the market. I mean, if you're looking towards retirement, you're going to set forth a good, solid plan that's slowly starting to transition you more into preservation and less in accumulation. So that's part of it. But if we are in the midst of it and all of a sudden we've seen that we've had a pretty significant decline, we need to reassess.

We don't want to make any rash, emotional decisions. That doesn't serve us well at this point. Fear is not going to be helpful. But sitting down with a retirement planner, somebody who specializes in retirement preservation and looking at this holistically is going to give you a better understanding of what should be the next step, if a little bit of it does need to go maybe into something that's more fixed, like an annuity or something like that, like a fixed-indexed annuity, or do we just need to pull back a little bit of our risk? But these are the things that you just don't do on your own. That's why hiring somebody to partner with you is going to help you navigate that space much more effectively.

SEANA SMITH: Arwen, what are you hearing from your clients? Are they trying to change their asset allocations at this point?

ARWEN BECKER: No, not at all, just because for us, as a company, since we do specialize in retirement, we always are looking towards preservation first. So when people are starting to look towards retirement and being on fixed income, we're always looking at transitioning a portion of their assets into more of a pension replacement because a lot of-- I mean, a lot of people, you're talking about Boeing. I mean, we retire people from Boeing all the time, and they're getting out of the pension business.

So you know, us-- as most Americans don't have pensions available, so we need to figure out, what's going to be our pension replacement? For a lot of people, that might be a fixed-indexed annuity, something that's going to have guaranteed income that you can draw down. While you're at growth money, it can weather this storm and really be your longevity and your inflation protection for the future, especially for women.

SEANA SMITH: All right, Arwen Becker, owner of Becker Retirement Group, thanks for joining us this afternoon.

ARWEN BECKER: You're welcome. Thanks for having.