For years, your plan sponsor clients have told participants: Save more. But what do they say to workers about how much they should spend in retirement? As a retirement plan advisor, you have the opportunity to help plan sponsors have that conversation.
Capital Group’s recent survey of 1,200 retail investors found that respondents want more help making the transition to retirement. They don’t know how much income they will need, and they want guidance on how to translate their savings into a steady “retirement paycheck.”
Survey results suggest that people want a predictable stream of retirement income:
Investors want to feel empowered to create a retirement paycheck
Our survey results show participants need help, especially when it comes to retirement spending:
Participants are not as confident about how much to take out in retirement
Your plan sponsor clients have spent a great deal of time and effort developing retirement education and communication tools. Yet our survey found people are looking for more — and that current educational efforts may be missing the mark.
We asked investors what types of tools and information they wanted from employers to help navigate their retirement plans. Responses varied:
These survey results suggest “one size fits all” models may not be effective in engaging broader employee populations. So how do you help plan sponsors reach more people?
For many investors today, building a nest egg starts with an employer-sponsored retirement plan. According to the survey, most investors (88%) believe it will be important to invest and grow their nest egg after retirement. That means your clients should anticipate that participants may choose to keep assets in-plan throughout retirement rather than rolling over into an IRA. They may be looking for efficient ways to draw paycheck income while investing for additional portfolio growth. You can help your plan sponsor clients have a significant, long-term impact on the way participants plan for and transition assets for income by helping them:
Participant interest in building a retirement paycheck is strong and will likely remain so as more baby boomers retire and more Gen Xers pass their 50th birthday. Our survey suggests that better workplace investor education and in-plan solutions geared specifically for retirement income may help participants feel more confident that they can retire comfortably.
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