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How to financially prepare for retirement amid pandemic, market volatility

Institute of Financial Wellness CEO Erik Sussman joins Yahoo Finance Live to discuss how to financially prepare for retirement with the market volatility amid COVID-19.

Video transcript

KARINA MITCHELL: Well, market volatility has been heightened with the introduction of the new COVID variant, and anxiety is high. Here to discuss how a new platform plans to alleviate some of the stress surrounding overall financial health is Erik Sussman, Institute of Financial Wellness CEO. Thank you so much for joining us today. Now the Institute of Financial Wellness is new and offers financial and education advice to individuals. Why was this the right time to launch this platform?

ERIK SUSSMAN: Hi, Karina. How are you? It's definitely a very, very important time for our program because there's never been, I'd say, more uncertainty than today in what's going on. We have so much going on with the healthcare situation with COVID. And uncertainty, it often causes a lot of fear and anxiety. And fear and anxiety, the fear of the unknown, it makes people nervous. And I think this is a great time to give people proper information so that they can make informed decisions. And that's why I think it was a great time for the Institute.

ALEXIS CHRISTOFOROUS: So Erik, there are lots of places that do what you do, that claim to do what you do. What's the great differentiator here for you?

ERIK SUSSMAN: Well, that's a great question. And I think the real difference for us is that we've really created an arsenal of content, really original content. And it's brought by people that are actually practitioners, financial practitioners that are in the middle of it all. They're dealing with consumers day in and day out. They're thought leaders. They do things that-- you know, they're really close to home. So that really makes it very effective because people can relate to it.

And the thing is we do it through many, many different distribution channels. There's website, social media, SMS marketing, all the different kinds. And we're really-- the other thing that differentiates the Institute of Financial Wellness from other places is that we help connect and select financial professionals that the consumers can connect with so that they can drive home the strategies that they learn about.

KARINA MITCHELL: And we saw some of the financial tips that, you know, you advised. And one of the things you do is offer free personal reports. I'm wondering what types of information can be found inside those reports.

ERIK SUSSMAN: Well, the biggest fear that a lot of people have is running out of money in retirement. So it used to be that people would retire at 65 years old. They'd live till 70, 72, spend six to eight years in retirement. They had a defined benefit pension plan, which is a pension plan that could secure guaranteed income for the rest of your life. And it was really up to the employer to provide that. And the burden was on the employer to make sure that they were providing that.

These reports that we provide show that with your 401(k), which is a defined contribution plan, where 90 something percent of workers are now having the 401(k) plan, it's really on them to take personal responsibility for making sure that they don't run out of money. These reports that we have show how people can make sure that they delineate exactly what they need to do to make sure that they never ever run out of money in retirement.

And we also show some techniques that a lot of people aren't familiar with because most people are so focused on the accumulation of their assets that they don't really think about the distribution of their assets. And we're training our audience members to begin with the end in mind, to focus on not only the accumulation, but the distribution of their planning as well.

ALEXIS CHRISTOFOROUS: Erik, real quick on the inflation front, what does that do to the American household sort of psyche? I mean, we all are paying more for everything, from gas to groceries to furniture to clothing, but what is that going to do? What does inflation fears-- what does that mean for American budgets going forward, do you think?

ERIK SUSSMAN: Well, I think it's a big concern for a lot of people because so many of us are living on fixed incomes, or the big fear, again, going back to it, is people are afraid of running out of money in retirement. So if milk goes up by 6%, that puts a strain. When fuel prices go up significantly, that puts a strain on things. So it increases the worry that people have, which is exactly why we created the Institute of Financial Wellness, because we want to eliminate and lessen those fears that people have. And we really feel passionately that by having proper education and people really understanding how to beat inflation potentially, how to guarantee income for the future, that with this information, they'll be more empowered and less anxious.

KARINA MITCHELL: All right, we will leave it there. Erik Sussman, Institute of Financial Wellness CEO, thank you for your time.