Formal retirement plans result in measurable benefits for investors, according to the LIMRA Secure Retirement Institute (LIMRA SRI). Pre-retirees and retirees with a formal retirement plan save more and are twice as likely to have estimated their expected income and expenses in retirement. They are also more likely to have calculated how long their savings will last.
As a result, according to LIMRA SRI, they are three times as likely to feel prepared for retirement.
However, only 35% of advisers have worked with their clients to develop a formal retirement plan. In fact, more than 50% of affluent and high-net-worth clients, those with assets of $500,000 or more, do not have formal plans. LIMRA SRI also learned that people with formal retirement plans are more likely to have purchased a guaranteed income product. In fact, they are 70% more likely to own an annuity, and these people are more confident that should they live past 90, they will still be comfortable in retirement.
Nearly half of affluent and high-net-worth people with a formal plan have consolidated 90% or more of their assets with their adviser, double that of those without a formal plan.
Sixty percent of people with a formal plan say it has improved their trust in their adviser.