Seventy percent believe their advisers have a responsibility to discuss guaranteed lifetime income products with them.
Tag: Retirement Income
More than three in 10 have no retirement budget.
The annual report from BlackRock offers quite a deep dive into the large 401(k) plan population; highlighting many well-known retirement industry trends, but also a few that are less well-observed.
Anne Ackerley, head of BlackRock’s defined contribution business, sat down last week with PLANADVISER to offer a sneak peek at the DCIO provider’s latest DC Pulse Survey; the data shows increased confidence among plan participants, while sponsors have emerging decumulation concerns.
According to data from CEM Benchmarking, defined benefit pensions have outperformed defined contribution plans by less than half a percentage point over the last decade—described as a “huge improvement” for DC plan sponsors.
Some of today’s retirees are financially fragile, but most appear able to absorb financial shocks without incurring severe hardship; this may very well change in a DC plan-dominated future, CRR researchers warn.
The study also found that 56% of retirees who work with an adviser own an annuity, compared to 28% of retirees who do not work with an adviser.
“While appropriate for some participants, heavy reliance on equities is almost certainly not suitable for as many 401(k) participants as the allocation of the largest TDF managers suggests,” P-Solve argues. “TDFs are built mainly for favorable economic and market environments.”
Among Baby Boomers who think it is important to work with an adviser, nearly 70% said they would purchase an annuity within their individual retirement account (IRA), according to a survey by fixed income annuity provider Annexus.
New Cerulli research shows the most common reason for which 401(k) plan sponsors offer participants a managed account service is that it can be positioned as a retirement income solution; also considered is the emergence of so-called “shadow fiduciaries.”
Over a six-year period, projected income replacement scores in plans managed by Empower increased from 68% to 77.8%
Only 31% of Americans are confident they will have saved enough by the time they retire.
Only 20% said they were very confident they will have enough money to retire comfortably, Paychex found in a survey.
It starts by determining each individual’s needs.
Plan sponsors are being more conscious and cautious with respect to managing the implications of the DOL fiduciary rule—and this is impacting plan leakage and rollover decisions to a strong degree, Callan says.
While the researchers say advisers may need to modify their business models slightly, the strategy uses existing resources and capabilities plan sponsors and providers have.
One-third say they plan to save $200,000 or less to be comfortable in retirement; they only expect to live to age 81; and very few feel they will end up in an assisted living facility, according to a survey.
“Understanding and discussing the tax impact of your investment and retirement account withdrawal recommendations is not the same thing as giving tax advice,” explains Joe Elsasser, president of Covisum.
As the firm explains, the program begins with a baseline retiree analysis proactively delivered to each plan participant flagged as retired, and includes a personalized investment strategy recommendation in tandem with a monthly spending guide for their qualified plan assets.