Turning retirement uncertainty into a plan

Key takeaways:

• Many clients struggle to estimate retirement expenses.
• Retirement uncertainty can delay planning decisions.
• Translating savings into monthly income helps improve understanding.
• Guaranteed income strategies can help reduce retirement uncertainty.

When clients begin thinking about retirement income, one question often stalls the conversation:

“How much money will I actually need?”

For many households, the answer isn’t clear. Retirement spending can depend on a range of unknowns — from healthcare costs and housing decisions to lifestyle choices and longevity.

That uncertainty can lead to hesitation — or no decision at all.

Why retirement income planning feels difficult

A survey of 946 Americans conducted by researchers at the UCLA Anderson School of Management and Duke University found clear generational differences in retirement planning confidence. Their findings, contained in a white paper commissioned by Athene, highlight how Gen X and millennials approach these decisions differently.*

These younger generations reported wider ranges of expected retirement spending than baby boomers.* They also expressed greater concern about not saving enough for retirement.*

That uncertainty matters. The research found that individuals who were more worried about retirement income were more interested in annuities.*

The more uncertain clients feel about retirement income, the more appealing guaranteed income becomes.

Why clients struggle to estimate spending

Two behavioral biases help explain why retirement planning can feel difficult.

1. Present bias

   People tend to prioritize spending today over future consumption. Retirement income can feel abstract, especially for clients who are years away from retiring.

2. Wealth illusion

   Large balances can feel reassuring, even when they’re not fully understood. A client may feel confident seeing $500,000 in savings without knowing how long it could last in retirement.

These biases can make it harder for clients to translate savings into a realistic income plan. Working strategies like these into conversations with your clients may help planning feel easier to them.

Strategy: make retirement spending more concrete

Many clients have never fully estimated what retirement will cost. You can make these conversations more productive by helping clients build structured, realistic projections.

Example:

Instead of asking:

“What do you think you’ll spend in retirement?”

Try breaking the question into categories:

• housing
• healthcare
• travel
• lifestyle spending

Strategy: translate savings into income

Clients don’t think in lump sums. They think in monthly budgets.

You can help retirement planning seem more tangible by converting portfolio values into income equivalents.

Example:

Instead of saying:

“You’ve saved $800,000.”

Try:

“The $800,000 you’ve saved could generate about $3,500 a month in lifetime income.”

Strategy: address healthcare costs directly

Healthcare remains one of the most uncertain — and often overlooked — retirement expenses.

Baby boomers may underestimate these costs, while Gen X and millennial clients may not yet factor them into their plans.

You can help bring more clarity by discussing:

• Medicare coverage gaps
• long-term care costs
• strategies to help protect retirement income

Strategy: recognize midlife financial pressures

For many Gen X and millennial clients, retirement planning doesn’t happen in isolation. They are often balancing competing priorities, including:

• mortgages
• college expenses
• eldercare
• student loans

Clients often hesitate, not because they aren’t interested, but because they can’t clearly visualize what retirement will look like.

When you help clients translate savings into reliable monthly income, retirement planning can become more concrete. And when that happens, annuities may become easier to understand, evaluate and incorporate into a broader strategy.

For deeper insights into how generational differences can shape retirement planning — and for more practical strategies you can apply — download our latest white paper: Solving the Annuity Puzzle for New Generations of Consumers.

Insights on Athene Connect. Tips, tools and resources to grow your business by helping clients retire with confidence.