American workers’ confidence in their ability to afford a comfortable retirement remains low, according to the 23rd annual Retirement Confidence Survey (RCS) conducted by EBRI and Mathew Greenwald & Associates, Inc. The 2013 RCS was released on Tuesday.
The percentage of workers who are confident about having enough money for a comfortable retirement was essentially unchanged from the record lows observed in 2011, according to the survey. While more than half expressed some level of confidence, 28% are not at all confident and 21% are not too confident.
Behind the numbers, though, the study highlights the significant opportunity for financial advisors to help Americans get back on the right track. For example, most workers — 45% — merely guessed at how much money they will need to accumulate for retirement, rather than doing a systematic needs calculation. Only 18% said they had consulted a financial advisor to help them with the estimate; another 18% tackled their own calculations.
But the survey also highlights the need for advisors to focus on following through with each client. Of the 23% of workers and 28% of retirees who reported that they have obtained investment advice from a professional financial advisor who was paid through fees or commissions, only 27% followed all of the advice, while most disregarded some or all of it. The main reasons for disregarding the advice were:
• not trusting it;
• not being able to afford it;
• having their own ideas, or other plans or goals;
• changing circumstances rendering the advice no longer applicable; and
• getting better advice somewhere else.
However, Americans who don’t yet work with a financial advisor indicated that they may do so as they get closer to retirement. Half of workers who have saved for retirement said if they consult a financial advisor in the future, it will be very important for the advisor to specialize in converting assets into retirement income. Another 31% indicated it would be somewhat important for an advisor to be a retirement income specialist.
