Retirement Anxiety

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Beyond the Challenge is a podcast where executives in the insurance and financial services industry share their insights and experiences. Hosts Kevin and Sandy Dougherty talk with today’s top business leaders about what keeps them up at night and the biggest opportunity organizations can capitalize on today. We encourage you to listen, share, and subscribe to our program.

Kevin and Sandy Dougherty each have over 20 years of experience in insurance and financial services, corporate leadership, and executive search. They’re the owners of Global Corporate Solutions and Global Corporate Leaders. Global Corporate Solutions partners with organizations to gain efficiencies and contain costs. Global Corporate Leaders partners with organizations to enhance and evaluate talent.

Beyond the Challenge podcast is sponsored by Exactuals, perfecting payments and the data driving them; Techficient, transforming the protection journey with intelligent data and machine learning to drive better outcomes; and JourneyGuide, improving your clients’ retirement outcomes through interactive planning software.

Welcome to Beyond the Challenge. Here are your hosts, Kevin and Sandy.

Kevin: Welcome to Beyond the Challenge. We have spent the last year talking to some of the most influential and forward-thinking leaders in the insurance marketplace.  Their perspectives have been very well received by our audience and we thought it was time to put together some of our favorite guests to see what they thought about some hot topics.

Sandy: In this episode you will hear from Wayne Chopus, President and CEO of the Insured Retirement Institute, Robert Grubka, CEO of Health Solutions at Voya Financial, Steve Scanlon, Managing Director and Head of Retirement at Equitable, and Andy Bucklee, SVP. Head of Life Insurance and Executive Benefits Distribution at Lincoln Financial Group.

Sandy: During our interviews, we asked our guests what they thought was the next big thing coming to their vertical of the industry.

Kevin: Let’s start with what Wayne Chopus from Insured Retirement Institute had to say.

Wayne: There are many, many ways. For purposes of time, I think I’ll highlight one in particular here, and as a reminder, your audience, really, our mission is to champion retirement security for all Americans. So, we do that in a lot of different ways. We have an award-winning advocacy team that’s advancing a very comprehensive piece of legislation right now. It’s the second comprehensive retirement security measure that we’ve seen in the last three years. If I go back in time to 2019, Secure 1.0 passed through I think it was in December of 2019. It was the largest piece of retirement legislation passed in over a decade. We worked really hard on a lot of provisions that sat within that bill to expand access to workplace retirement plans, to lower barriers, to offering lifetime incomes in plans, to increase the RMD age, required minimum distribution age, to 72 to allow more workers and retirees to save as retirement has changed. There was a lot of incentives on small business offering plans and, as I said, at the time, most significant piece of legislation over a decade, but we did not rest on our laurels there. We’ve been working really well since then I’m Secure 2.0, which is this year’s bill that has some enhancements on auto enrollment provisions, helping out workers with student loans, catch up contributions increasing, moving the RMD age up to 75 now, and a lot of what we do now here day in and day out from an advocacy standpoint is focused on that. It’s through the House, it’s focused on getting it through the Senate. We’re working really hard on the Hill to move this through and we’re very optimistic that Secure 2.0 and all of these great improvements for retirement security will be passed and signed by President Biden by year end.

Sandy: So Wayne says IRI is working with an advocacy team that’s advancing comprehensive pieces of legislation.

Kevin: Yes, they work on many of the provisions within the legislation such as offering lifetime incomes in plans and increasing the Required Minimum Distribution age to 72 to allow more working to save more for retirement. Now it’s time to hear from Rob Grubka at Voya.

Rob: Yeah, it’s — and I’ll speak very much from a Voya perspective on this one. As a leader in the retirement business, you know, we’ve got north of 50,000 employers that we work with and millions of end customers that we support from a retirement wealth perspective and we see a great opportunity, back to earlier point around just the number of decisions that employees are making. We see a real need for what has been, you know, historically distinct and separate enrollment experiences and education experiences. How do we bring those together and have it feel more cohesive? At the end of the day, the benefit choices that people make are related. At some point, they’ve only got so much money that they can spend and put into different benefit decisions and there’s gonna be tradeoffs and, again, as you think about retirement, an example of something that goes on quite frequently is whether it’s loans or hardship withdrawals from the retirement savings that someone has, maybe a third of the time our data tells us that’s driven by medical issues that came up, you know, and may run out of places to tap into savings to maybe pay those medical bills and that’s a real issue today. And so, as we think about the interconnectivity on decisions that employees have to make, certainly at the point of enrollment, there’s education that can be provided and tradeoffs that can be presented. So, for instance, HSAs have grown in popularity over the last number of years as high deductible health plans have grown. And, you know, there’s a great savings element to health savings accounts and not all people know that. Some people think about them as much like, you know, what they were introduced to before was the flexible spending account and, “Hey, don’t forget to use all that money that you put in your flexible spending account,” and a lot of that translated over to people’s understanding of HSA products and solutions and so there’s a savings element there that is incredibly valuable to the employee as they think about healthcare spend and expense in retirement. And that’s usually a big driver of what people tell people to save for retirement is like, “Max it out, do as much as you can, and here’s why you do it because you’ve got medical costs, you’ve got the trips you want to take, the living that you need to do,” and all those things that come with it and are people thinking about the balance of saving in one place versus the other? And so we see a really great opportunity to bring together the enrollment conversation into one place. And how do we, again, help represent and present those tradeoffs and have people understand how these decisions work together we see as a really great opportunity to differentiate and really add value to the employee and the decisions that they’re making and I think employers are interested in, again, how do we simplify this? How do we have people, their employees, have the perceived value that they know is there but may not always come through when you have very distinct and separate experiences around enrollment and the education that gets delivered and how.

Sandy: Rob’s company Voya is working on educating American’s on how to balance their health benefits within their retirement planning.

Kevin: Yes, he talked about the frequency of hardship withdrawals from retirement savings that are often driven by medical issues and how Voya is educating their clients on how to avoid early retirement withdrawals by using tools like HSA’s. Let’s see what Steve Scanlon from Equitable had to say.

Steve: Anxiety is often driven by fear, as you mentioned, and I think the reality is that there’s a lot going on that people are worried about and some things haven’t been around in quite some time. I mean, we haven’t talked about inflation in over 20 years, we haven’t talked about rising interest rates in over 20 years, and those things are now creeping into people’s portfolios and so, for a very long time, a standard sort of 60-40 portfolio, 60 percent equities, 40 percent bonds, the bonds were there to protect the volatility of the equities. I think everybody generally understands there’s volatility in equities. I don’t think a lot of people understood that there’s volatility in bonds when interest rates go the other way because it’s been so long. So we’re in the protection business so we are here for people that say, “I need to be invested because I’ve gotta fund this retirement that could last 30 years, but I want to feel better and sleep at night,” and that’s what we do. That’s what we provide is the ability to keep people invested and allow advisors to use annuities as a tool to help investors get what they need to do, which is to stay invested, but also deliver what they want, which is that comfort to know that I’m going to have guaranteed income or I’m going to have protection from volatile markets or I’m going to be able to use tax deferral to outpace inflation. So this is kind of our time. This is when annuities really resonate with advisors and certainly with clients because of the fear that’s out there driven by all the different things that we’ve got to face right now.

Sandy: Steve at Equitable sees most retirement anxiety driven by fear.  That there are so many factors that haven’t been around in over 20 years like rising interest rates.

Kevin: He also mentioned the volatility in bonds when interest rates go up and the fact that many advisors have never worked in a rising interest rate environment.  The traditional 60-40 portfolio may not be right anymore and that annuities could be a tool to help investors get what they need.

Kevin: Finally, let’s hear what Andy Buckley from Lincoln had to say.

Andy: We believe at Lincoln that our mission is to help Americans with their retirement and achieve their retirement goals and their financial goals. And we believe that we do good things for America and good things for Americans. And as an example, if you think about it at Lincoln, we’ve got a portfolio that’s over $300 billion dollars and we invest that portfolio in creating jobs in America, we buy businesses in America, we buy real estate in America, and so we invest back into the American economy. We also help Americans with their retirement goals through our annuity portfolio, our retirement portfolio, our protection group through employers, and obviously with life insurance paying death claims. Now when I think about COVID as an example, during COVID, we paid out over $27 billion in death benefit claims, which is actually about two and a half billion dollars higher than we had originally projected, which is a good thing. It means we came through with our promise to help Americans. We wrote our first policy 117 years ago and we’ve been insuring Americans with strong solutions ever since then and not just in life insurance but, as I mentioned, in annuity products, life products, long-term care products, our protection business as well as our retirement business.

Sandy: Andy and Lincoln look at retirement anxiety a little differently.  He said Lincoln helps reduce anxiety by investing in Americas economy, creating jobs, and helping Americans reach their retirement goals through the portfolio of products Lincoln offers.

Kevin: Lincoln has a full suite of products from annuities and life insurance to investments which all can play a role in a balanced retirement plan.

Sandy: All our guests believe that Americans need to reevaluate their retirement plans based on the changing interest rates and inflation and that the strategies of the past 10 years may not be right today.

Kevin: I really enjoy going back and listening to our past interviews.  I always tend to find something new that I missed the first time and today was no different.

Sandy: I agree, I always pick up at least one more tip that I missed the first time.

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