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Want to Improve Retirement Income Outcomes? Put it in Writing.

Retirement Income Outcomes

Want to Improve Retirement Income Outcomes? Put it in Writing. According to a new study from the LIMRA Secure Retirement Institute, only a little more than a third of retirees and pre-retirees who work with a financial adviser have a written income plan for retirement.

Specifically, LIMRA found that just 35% of retired clients and 38% of pre-retirees who work with an adviser have a formal written retirement income plan. While consumers say they want help with retirement incoming planning, it isn’t enough to simply hire an adviser. Without a clear, written roadmap to follow, many retirees and pre-retirees are lost when it comes to creating an income from a lifetime of savings.

According to LIMRA’s “Dear Advisor” study, most consumers seek an adviser’s help to:

  • Minimize the risk they’ll run out of money (42%)
  • Protect their savings (32%)
  • Reduce their tax liabilities (27%)

Two-thirds of the 29% of pre-retirees who said they felt “well-prepared” for retirement said they had a formal written plan, LIMRA found.

There are takeaways from these findings that apply not only to financial advisers but plan sponsors, too. For example, LIMRA recommends checking in with pre-retirees and retirees at key milestones. These include:

Age 59 1/2, when qualified retirement plan assets can be withdrawn penalty-free

Age 62, the earliest age a person becomes eligible to collect reduced Social Security benefits

Age 65, when eligibility for Medicare enrollment kicks in

Age 66-67, the age range for full Social Security retirement benefit eligibility (depending on birth year)

Age 70, when a person becomes eligible to collect maximum Social Security benefits

Age 70 1/2, when a person must begin taking annual required minimum distributions (RMDs) from their retirement accounts

These are all times when creating a formalized, written plan for retirement income would be pivotal. They are also touch points where it can be tremendously helpful for sponsors to provide “just-in-time” education on these timely topics at each of these critical stages. In addition, if your plan partners with an adviser, these milestones can be the perfect opportunity for that person to check in with plan participants to help get them on the right track and help them create a written plan to better prepare them to generate a steady stream of income in retirement. Of course, the hope is that most employees will be retired by age 70, but with more people choosing to work longer, it’s feasible that they may still be a part of your workforce and in need of timely guidance.

LIMRA’s advice to advisers was: “Do more retirement planning. Help clients at the time of their key decision points. Offer training on popular topics beyond traditional investing strategies…” Plan sponsors can do the same by checking in with plan participants at key milestones and offering relevant education and resources — including connecting them with the plan’s adviser (if applicable) — to help them be better prepared for their post-working years.

Robyn Kurdek

Robyn Kurdek

Freelance writer with nearly 2 decades of financial industry experience, with niche expertise in the defined contribution (DC) industry. I also have defined benefit (DB) plan knowledge. I write all types of content for retirement plan participants, sponsors and advisors, including web copy, newsletters, white papers, fact sheets, blog posts, financial wellness articles, and more. "I speak DC."
Robyn Kurdek
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