All too often when we talk about retirement, the discussion quickly turns to running out of money rather than the enjoyable ways people plan to spend this next phase of their lives.
As a plan sponsor, you may increase your employees’ readiness in their financial futures by helping them access planning and professional advice. You can help your employees determine how prepared they’ll be by giving them access to education, advice and investment menu options aimed at helping them pursue income for life.Helping set the right goals
Consider working with your plan provider to make sure you’re offering resources that enable employees to:1
Professional advice can help your employees create long-term plans that will take into consideration their unique situations. Despite most Americans (71 percent) saying they are interested in receiving advice, more than half haven’t.3Why some don't seek advice
Understanding why employees have not sought advice is the key to getting them to engage. Among the reasons respondents gave, not having enough money to invest (51 percent), concerns about cost and affordability (45 percent) and not knowing whom they can trust (34 percent) are the most common.
Still, others don’t know where to look for professional advice (22 percent), or they simply feel they are too young for it (10 percent).4Advice for just about everyone
As part of your educational efforts, consider:
You may also want to review your current advice services, and consider:5
Along with advice, many of your employees are looking for retirement income options. Half of Americans (49 percent) with an employer-sponsored retirement plan think its primary goal should be to provide guaranteed money every month to cover living expenses in retirement. And 24 percent believe their plan’s goal is to ensure that their savings will be safe, regardless of market conditions.
Many employees are not certain that their retirement plan offers an investment product that can provide guaranteed monthly payments. But the majority (62 percent) would prefer to get a monthly retirement income option from their employer rather than shopping for it on their own.
Have or have not?
The takeaway for employers: You may want to ramp up education around retirement income—and consider adding a guaranteed income* option to plans that don’t already offer them.Planning for, not worrying about retirement
Encouraging your employees to seek professional advice may help them put a retirement plan in place that can provide lifetime income. You may also find that employees who have a plan in place can focus on what they’ll be doing in retirement, rather than whether they can afford to retire. And not worrying about outliving their savings may encourage reluctant retirees to retire at a traditional age, which can help you manage workforce needs.
1 The 2016 TIAA Lifetime Income Survey was conducted by KRC Research by phone among a national random sample of 1,000 adults, age 18 years and older, from June 7-16, 2016, using a combination of landline and cell phone interviews. The margin of error for the entire sample is plus or minus 3.1 percentage points. Margin of error may vary depending on subgroup analysis.
2 They estimate they will need less than 75 percent of their current income (compared to expert recommendations of 70 percent-100 percent).
3 The TIAA 2016 Advice Matters Survey was conducted by KRC Research online among 1,000 adults, age 18 years and older living in the United States, from August 10-15, 2016. The sample was proportionally obtained by demographics such as age, gender, region and income to ensure reliable and accurate representation of the national population age 18 and older.
4 TIAA 2016 Advice Matters Survey
5 TIAA 2016 Advice Matters Survey
6 TIAA 2016 Lifetime Income Survey
*Guarantees are subject to the claims paying ability of the issuing company.
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