Retirement Planners Focus on Retirement Income

Investors say the most important question an adviser can answer is how much can they afford to spend each year in retirement, according to a Dimensional Fund Advisors survey.

Investors planning for their post-employment years, as well as those already in them, want to know what they will be able to spend annually, a survey from Dimensional Fund Advisors found.

Twenty-eight percent of those planning for retirement said that is the most valuable information an adviser can provide them. Additionally, of the nearly 19,000 investors responding to the global survey, 28% said their likelihood of achieving their retirement goals is the most important information their adviser can provide, and 22% cited how much of a nest egg they will have in total as the most important information.

For those already retired, the most important information is how much can they spend each year (33%); average annual returns they can expect during their retirement years (24%); and the total amount of money they will have for retirement (23%).

“The survey shows that individuals are thinking about what their income in retirement will be, and we are encouraged by this finding,” says Stephen Clark, head of global institutional services and president, Dimensional International. “We believe this is one of the most important things that investors saving for retirement need to consider and plan for—what their consumption needs will be in the future and if they will be able to afford them.”

Key worries of survey respondents include:

  • Not having enough money to live comfortably in retirement (37%);
  • Experiencing a significant investment loss in a market downturn (31%);
  • Outliving their money (13%); and
  • Incurring unforeseen expenses (12%).

More survey data can be found here.