In a well-documented study decades ago, British scientists set out to determine how a worker's position on the corporate ladder corresponded to their stress level. It was assumed that more responsibility led to more stress, which in turn led to more incidents of serious health care issues.
The Whitehall Studies produced some interesting findings. Workers higher on the corporate ladder were actually less stressed, due to the amount of control they had during the day. And a worker’s responsibility had nothing to do with stress-related health issues.
I would argue that the same can be said about retirement planning. The amount of money involved is irrelevant. When an individual feels uncomfortable about their income stream, that uncomfortable feeling translates into stress, which increases the probability of problems.
Imagine your stress if you become a burden to your family members. Unfortunately, that stress will begin to form many years before you run out of money or have health issues. Without guaranteed income, you risk being a burden. Because of risks like this, a retiree's stress level can become unbearable.
Income annuities can prevent most of this stress. While the return is not in the range of equities, the power of safety promotes comfort and control. When individuals feel in control of their future, they feel less stressed.
Just as control at work could ease a worker’s stress, I believe Americans would benefit from the safety and comfort of a conversation with their financial advisor.
© 2018 Ash Brokerage LLC.