What If You Threw A Retirement Party. . .And Nobody Came?

While investors and their financial advisors have long grappled with the myriad challenges associated with successfully migrating from the accumulation side of the retirement planning continuum to implementing strategies that provide ongoing and dependable in-retirement income, the wealth management industry seems convinced that both audiences are finally ready to act. And maybe they are. After all, the first wave of baby boomers is beginning to reach the traditional retirement age of 65. At the same time, Americans exhibit less confidence than ever in the Social Security system. Finally, one would be hard pressed to find a single retiree, at almost any income level, that isn’t afraid of what one serious health-related incident could mean for their finances, and by extension, their lifestyle in retirement.

Guaranteed pension plans have been off the table for most Americans for decades now, having been replaced by IODC plans like the ubiquitous 401(k) plan. So, as investors begin to wind down their contributions to these largely self-funded retirement accounts, and begin to think about turning on the retirement income spigot, what are they looking for and how well equipped are they to make good choices? Furthermore, what is the role of the financial advisor, whose job has historically been to gather assets? What do these important stakeholders involved in the retirement income dilemma want, and need, from asset managers?

In a recent study, we talked to investors near or at retirement and advisors from a wide variety of channels, we found some interesting answers to these and other important questions.

COGENT THOUGHT

As the industry grapples with retirement income solutions in the race to “build a better mousetrap,” we believe that many in the wealth management arena are too focused on product-oriented solutions at a time when advisors and investors alike are requesting process-oriented solutions.