The latest survey results showed that slightly more workers did, in fact, seek out an adviser. The number of workers (age 25 and older) who sought out investment advice from a professional adviser over the past year rose to 33% in 2010 from 30% in 2009. Likewise, the number of retirees rose to 32% in 2010, up from 26% in 2009, according to EBRI.
Now that investors have put out the fires and want to focus on retirement savings again, advisers might have an opportunity to help. “People are ready now to get back to the basics of saving for the long-term as opposed to just trying to make it through the short-term,” said Tim Minard, senior vice president of distribution for retirement and investor services at The Principal Financial Group, which was one of several underwriters of EBRI’s study. Minard noted that the increased appetite for advice shows that consumers are interested in sitting down and having a plan—which could be an opportunity as advisers move toward fee-based, financial planning services.
After financial advisers, workers and retirees said they turn to family, friends, or co-workers (27% of workers, 17% of retirees); newspapers or magazines (10% of workers, 8% of retirees); information on the Internet (10% of workers, 4% of retirees). At the bottom of the list are their employer or former employer (9% of workers, 1% of retirees) and the company managing their employer-sponsored retirement plan (7% of workers, 5% of retirees).
Retirement Savings Hurdles
While retirement confidence has stabilized, fewer workers reported that they and/or their spouses have saved for retirement, and an increased percentage of workers reported they have virtually no savings and investments at all. In fact, EBRI found that three in 10 Americans age 25 and older reported saving no money for retirement. Furthermore, many workers continue to be unaware of how much they need to save for retirement. About one-quarter of workers reported they have postponed their planned retirement age in the past year, citing reasons such as the poor economy (29%) and a change in employment situation (22%).
Fewer workers have access to an employer-sponsored plan (73%, down from 82% in 2009). However, of workers offered a plan, more are taking advantage of it. Of workers offered an employer-sponsored retirement plan, 81% contribute (40% of all workers), which is up from 78% in 2009.
Similar to recent years, less than half of workers (46%) reported they and/or their spouse have tried to calculate how much money they will need to save for retirement, according to EBRI’s survey (see “Many Employees Guess How Much They Need to Retire”). The largest percentage (44%) of workers determine how much they need to save in retirement by guessing. Approximately two in 10 each report doing their own estimate (26%) and asking a financial adviser (18%).
While the preparation stats still show that many Americans are behind on saving for retirement, Principal’s Minard said the “bright side” is that Americans have returning confidence about the economy and their ability to retire, and can now start to save for retirement. “I think both at the adviser level as well as the individual investor level, 2010 is going to be a return to getting back to basic planning,” he said.
EBRI and Mathew Greenwald and Associates, Inc., conducted the 20th annual Retirement Confidence Survey in January among 1,153 individuals (902 workers and 251 retirees) age 25 and older in the U.S.