Retirement Planning Stakeholders Need to Get Real
Stakeholders in the retirement-planning process need to face up to their responsibilities if workers have a chance of enjoying their golden years, according to a pair of new surveys.
Leaving the workforce at age 65 is an increasingly anachronistic idea, according to a report by the Associated Press–NORC Center for Public Affairs Research, which surveyed 1,024 adults aged 50 and older. Spectrem’s Millionaire Corner published the results.
A whopping 82% of respondents said they are somewhat likely to work during what used to be called retirement. Half expect to retire later than they had originally planned. And about 45% admit feeling anxious about their level of retirement savings.
Financial advisors can lead the way forward, according to a report from Principal Financial Group, since plan sponsors and participants alike rely on their guidance. The company surveyed 148 asset managers, plan sponsors and advisors involved in 401(k) planning, with the aim of pinning down solutions to the puzzle of retirement. Advisors can add value for all stakeholders, Principal’s Julia Lawler tells FA-IQ.
For example, says Lawler, who oversees the company’s global investment services, advisors can help plan sponsors minimize costs on asset manager products, such as target-income funds. They can introduce features like automatic enrollment and automatic contribution increases at predetermined intervals. Lawler also suggests showing sponsors how to educate participants. Advisors can give personal-finance sessions on-site, explaining to participants that it is their responsibility to achieve their retirement goals.
Even advisors who don’t manage employer-sponsored plans can be part of the retirement solution, according to Principal. Pathway Strategic Advisors in Folsom, Calif., for instance, connects plan participants nationally with nearby advisors who offer investment advice beyond whatever guidance their employer provides.