Running Out of Money, Health Issues Top CPA Clients’ Biggest Retirement Fears

With an estimated 10,000 Baby Boomers retiring every day and with only little savings, it’s easy to see why running out of money is the greatest fear for American retirees—but it’s not the only thing this population is afraid of when it comes to preparing for retirement, according to a recent survey from the American Institute of CPAs (AICPA).

Running out of money topped the list of financial concerns for retirees, with 41% of CPA financial planners citing this as their clients’ biggest fear, according to the latest AICPA PFP Trends Survey released Thursday.

The PFP Trends Survey is administered as an online survey of CPAs who are members of the AICPA Personal Financial Planning Section, including those holding the CPA/PFS credential. Survey results are based on responses received from 500 AICPA members.


Along with fear of prematurely exhausting one’s finances, other top worries among CPA clients, including high net-worth individuals, concerned maintaining their current lifestyle and spending level, which 29% of CPAs reported was the next biggest financial concern for their clients. Concerns about rising health care costs were cited by 11% of CPAs.

“Since people are living longer, not having enough money in retirement is a legitimate concern and financial planners should have those difficult conversations with clients about planning for unexpected events and curbing spending if necessary,” said Susan Tillery, chair of the AICPA’s PFS Credential Committee, in a press release.

Here’s where developing a comprehensive financial plan, which is flexible and includes tax strategies to increase income in retirement, can address many financial worries confronting retirees, Tillery added.

Despite the findings that revealed 52% of retirees’ biggest fears were suffering a sharp decline in the value of their investments, the concept of using home equity to supplement retirement income as part of a financial plan was not discussed—although research in recent years has demonstrated the value of using housing wealth, particularly through a reverse mortgage, to protect against market volatility.

As retirees move deeper into retirement, the AICPA survey found their concerns shifted from financial to health-related issues, with serious illness, including dementia and diminished capacity being the primary concern, according to 44% of CPAs.

After 10 years in retirement, concerns about experiencing a sharp decline in the value of investments dropped to 28%, compared to 52% who cited this fear during the first 10 years of retirement.

“It is understandable that clients are increasingly worried about the financial implications of their health as they age,” Tillery said. “CPA financial planners can help alleviate these concerns by having frank discussions with their clients and addressing their financial fears.”

The reality, however, is that only 18% of clients are taking proactive steps to address this issue, while 35% are weighing the issue but have not yet decided on a specific course of action.

Not only must retirees and their families prepare for the financial impact of their aging needs, but the survey results also underscore the need for planners to prepare themselves to address these issues with clients.

“Many people are not only unprepared to deal with the emotional impact of dementia, but also how to pay for the long-term care for their loved one,” said Jean-Luc Bourdon, CPA/PFS, member of the AICPA’s PFP Executive Committee. “Even for families with considerable financial resources, dementia is a major financial obligation.”

As people are living longer and issues such as diminished capacity and elder financial abuse are becoming more prevalent, there is a great demand for comprehensive financial planning, according to a written statement from AICPA.

“A CPA financial planner serves as a trusted advisor who can understand their client’s needs and priorities both from a financial and personal perspective by having open, and often difficult, discussions with their clients and families,” AICPA said.

Written by Jason Oliva

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