Americans say they need the most help — and get the least assistance — with managing a retirement income program.
Those unmet needs exploded from 2012 to 2014, with demand for components in the “manage” category growing 10-plus points, according to a new Hearts & Wallets study, Retirement Income Programs & Employer-Sponsored Retirement Plan Engagement.
The survey finds that more than a third (33% to 42%) of older Americans desire services that execute a retirement income program, monitor progress and minimize taxes and income across multiple accounts.
More than two-thirds of consumers say they already have an “investment selection that will generate income,” improving from 51% to 67% in two years. This leads the report’s authors to note that while many firms are working on new investment products, that time and energy might be better spent unmet needs across the “manage” spectrum of services.
Tax ‘Mien’
That said, the service consumers most desire is help minimizing taxes, an unmet need that is highest at employer-based retail and DC providers that work directly with investors.
While the report finds that older Americans are getting better about having a written retirement income plan, those levels are still below 2008, when 82% had a good idea of where they would obtain their income. One in five affluent pre-/post-retirees has a written plan, and those with at least a “pretty solid idea of where my income should come from” grew slightly, going from 73% in 2012 to 77% in 2014.
Planning shifts into high gear once individuals reach the pre-retirement threshold. One-third of Late Careers (ages 53 to 64 with head of household having no plans to retire within five years) have a poor idea of income.
Retirement Planning ‘Triggers’
“Thinking seriously about retiring” remains the No. 1 planning trigger, but financial advisors are playing more of a role, jumping 6 percentage points from 23% in 2012 to 29% in 2014, according to the report. Spousal influence is third at 17% in 2014, down from 20% in 2012. On the other hand, employers are less influential, slipping to 10% from 16% in 2012.
The “oops!” factor — “already started taking income and realized needed to” — afflicts 16% of affluent households, and is most prevalent among the lower mass affluent.
For additional coverage of the Hearts & Wallets study, click here.
