Although most of your clients are focusing more on retirement planning and taking the necessary steps to prepare, there are some danger signs advisors and clients must be ready for.

Here are 6 economic factors that present a serious threat to secure retirement for employees.

Source: State of U.S. Employee Retirement Preparedness, Financial Finesse

1.  Weakened Day-to-Day Money Management

There was a decline in personal saving rates among employees in the first half of 2012 compared to the same period in 2011. This can be attributed to more employees requesting retirement plan loans and hardship withdrawals

2.  Uncertain Health Care Costs

The future of health care legislation and the impact it might have on cost in unclear. With costs expected to outpace inflation, health care remains a heavy burden on retirement planning.

3.  Inflation Perils

As the Fed continues to pump $40 billion-a-month in bond purchases, there is a risk that U.S. currency will ultimately devalue, leading to higher inflation rates. Translation – insufficient retirement balances to achieve an individual’s goals.

4. Potential Rising Taxes

There is the likely possibility of an increase in income tax over the long term as government will need more revenue to pay for social programs and national debt. This may reduce spendable cash and cash saved for retirement.

5. Burned-out Social Security

By 2033, the Social Security trust fund is expected to be drained, which will be a major obstacle to the millions of elderly who count on it.

6. Increased Life Expectancy

Life expectancy is expected to increase, which means future retirees will inevitably have to save more.

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