Kevin Hogan is chief government of insurer AIG's Life & Retirement division, the place he oversees the agency's particular person retirement, life insurance coverage enterprise and extra. He lately spoke with The Related Press about longevity, monetary anxiousness and different points surrounding retirement within the U.S.
The dialog was edited for size and readability.
Q. AIG lately carried out a survey of greater than 1,000 individuals — throughout 40 — and located that greater than half of them wished to dwell to be 100. Did that shock you?
A. You understand, it kind of did in a method but in addition, I used to be optimistic about that end result. I believe it is a reflection of the enhancements in well being care and life-style and consciousness. But it surely additionally did not essentially shock me as a result of there's been such a rising momentum in recognizing the implications of elevated longevity and what individuals can do earlier in life to arrange for that.
Q. This concept of residing longer can fire up monetary anxiousness for folk although, are you able to speak about what that appears like?
A. It is fairly fascinating as we take into consideration 'What does the brand new definition of holistic wellness seem like?' There is a rising consciousness of a kind of interdependency between bodily well being, psychological well being and monetary well being.
The implications from anxiousness about uncertainty in regards to the future can have an effect on bodily and psychological well being. And naturally, you recognize a stable monetary plan that anticipates the truth of an extended lifespan is one thing that may assist tackle that anxiousness, which in and of itself will result in a extra holistically healthful, longer life.
Q. The place do you see most individuals going fallacious in retirement planning?
A. I'd say is there are specific fundamental practices that everyone can undertake when it comes to being considerate about having a financial savings plan, profiting from the entire obtainable advantages from their employer, ensuring to concentrate on and reap the benefits of tax advantages, in addition to sustaining self-discipline.
However I believe that one of many issues that individuals run into that comes as a little bit of a shock is that there is a whole lot of concentrate on financial savings. With the demise of outlined contribution plans, individuals have to avoid wasting for themselves. And the emphasis is on financial savings, financial savings, financial savings. However the actuality is, while you get to that time the place it's a must to convert a lump sum into a life-style it is one thing that individuals discover very troublesome to do. That is very true within the unsure world the place you might dwell longer, which will increase the probabilities of an unanticipated well being situation or maybe some market volatility, et cetera.
Excited about simply the financial savings half versus what occurs after financial savings is among the huge challenges that individuals can run into as a result of after 45 years of pondering "I am unable to contact my 401(ok) or IRA cash" it's extremely arduous to modify gears abruptly. And that is very true within the unsure world the place you might dwell longer, thereby rising the probabilities of unanticipated well being points, market volatility, et cetera.
Q. You've got talked about how annuities assist with distribution, however is that too advanced for some individuals?
A. We discover that individuals that select to work with a monetary skilled are literally way more comfy and assured. It could actually complement what individuals can do for themselves with a well-articulated plan and understanding of the instruments as a result of it's advanced and each particular person's state of affairs is totally different.
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