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Questions to be Answered:

Retirement Security and the Affluent Walter H. Zultowski, Ph.D. WZ Research + Consulting, LLC RIIA Webinar January 19, 2011. Questions to be Answered:. What are the retirement security needs and concerns of the affluent? How are these needs and concerns changing?

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Questions to be Answered:

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  1. Retirement Security and the AffluentWalter H. Zultowski, Ph.D. WZ Research + Consulting, LLCRIIA Webinar January 19, 2011

  2. Questions to be Answered: • What are the retirement security needs and concerns of the affluent? • How are these needs and concerns changing? • What about the longevity risk? • How are they adjusting? • What about the use of annuities? • Are they getting help? 2

  3. Source: The Phoenix Wealth Survey Annual survey of affluent households ($1M+ of net worth, not including primary residence) Conducted continually for 11 years; 2000 – 2010 Most recent data collected First Quarter, 2010 To be continued in 2011 as the “LIMRA Affluent Monitoring Program” 3

  4. Retirement Security Needs and Concerns 4

  5. Financial Goals Source: 2010 Phoenix Wealth Survey 5

  6. Most Important Retirement Goals by Level of Wealth Source: 2010 Phoenix Wealth Survey 6

  7. Financial Risks to Retirement Security Source: 2010 Phoenix Wealth Survey 7

  8. Financial Risks to Retirement Security by Level of Wealth Source: 2010 Phoenix Wealth Survey 8

  9. How Are These Needs and Concerns Changing? 9

  10. Most Important Financial Goal Over Time Source: Phoenix Wealth Survey 10

  11. Financial Risks to Retirement Security Over Time Source: Phoenix Wealth Survey 11

  12. What About Longevity? 12

  13. The Psychology of Longevity Source: 2009 Phoenix Wealth Survey 13

  14. The Psychology of Longevity Description of Current Health Relative to Peers 2% 6% 21% 30% 41% Source: 2009 Phoenix Wealth Survey 14

  15. Importance of Longevity Planning Source: 2009 Phoenix Wealth Survey 15

  16. How Are They Adjusting? 16

  17. Planning on Retiring Full-Time Someday? 12% 9% 79% Source: 2010 Phoenix Wealth Survey 17

  18. Definition of a Comfortable Standard of Living in Retirement Source: 2010 Phoenix Wealth Survey 18

  19. The Use of Annuities 19

  20. Use of Annuities by Level of Wealth Source: 2010 Phoenix Wealth Survey 20

  21. Are They Getting Help? 21

  22. Percent With a Primary Financial Advisor by Level of Wealth Source: 2010 Phoenix Wealth Survey 22

  23. What Are They Getting Help With? Source: 2010 Phoenix Wealth Survey 23

  24. Percent With an Advisor for Life Insurance by Level of Wealth Source: 2010 Phoenix Wealth Survey 24

  25. Talked to an Advisor About Longevity Planning? 37% 34% 29% Source: 2010 Phoenix Wealth Survey 25

  26. Longevity Planning Solutions Discussed Source: 2009 Phoenix Wealth Survey 26

  27. Observations… Wealth does not ameliorate retirement security concerns Traditionally, retirement security for the affluent was primarily about lifestyle protection The Great Recession has heightened their concern over all risks associated with retirement security, even the risk of outliving assets The affluent would rather change their lifestyle in retirement than continue working 27

  28. Observations (cont’d)… The affluent market is underpenetrated when it comes to annuities The affluent market is highly penetrated when it comes to having advisors But, the majority of those advisors approach retirement planning with an investment/asset allocation mindset rather than an insurance mindset Longevity planning, as a subset of retirement planning, is of interest to the affluent 28

  29. Opportunities Annuities, in general, should witness an increase in sales The bigger opportunity rests in positioning and promoting retirement security as an insurance problem, not just an investment/asset allocation problem Educate, and work with, investment-oriented advisors on this opportunity New products: Insurance wrappers applied to investment products/portfolios Indexed annuities (a return play on the fixed portion of a client’s portfolio) 29

  30. Questions? 30

  31. 860-471-3692 | www.wzresearch.com

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