“80% of the assets in this country are controlled by baby boomers.”
-The Deloitte Center for Financial Services, 2015
Yet…
“61% of them fear outliving their income more than they fear death.”
-Allianz Life Insurance Survey, 2010
“81% of don’t know how much income they need to retire.”
-New Challenges, New Solutions,” 2017
“74% failed a retirement income literacy test.
-American College Retirement Literacy Survey, 2017
“84% don’t have a written retirement plan!
–TransAmerica Retirement Survey of Workers, 2016
Doubt the data? Hear it from the horses mouth…Americans answer questions about their retirement knowledge.
Clearly baby boomers are concerned. But they’re neither educated nor prepared for retirement.
And they’re obviously under-served by the 300,000 financial advisors in the U.S. Conventional advice, old school strategies, and rolling the dice and hoping for the best hasn’t gotten the average baby boomer very far.
Proper retirement planning is more than just an investment strategy.
Retirement Planning is much more than just traditional investment management (or a 401k plan), and not a lot of financial advisors are equipped to do it properly or completely. As Wade Pfau, PhD states, “Most advisors are investment-centric concentrating solely on managing investments and do not incorporate all the intricate retirement strategies that must be utilized to dramatically increase the probability of a retiree’s success”.1
Investment management is important, but other factors are paramount to a successful retirement outcome. A recent Vanguard Investments study indicated that integrating proper retirement strategies can add as much as 3% Efficient return to a retirement portfolio.2 David Blanchette, head or retirement research at Morningstar, found that proper retirement strategies can add 1.59% Efficient yield to a retirement portfolio.3
Learn more about Your Retirement Advisor’s Alpha Efficient Strategies
“Investors who have a written retirement plan are almost twice as likely as those who don’t to feel they have enough money to maintain their lifestyle after retirement.”
–Wells Fargo Gallup Survey, 2017
“People who have a written retirement plan are 60% more likely to increase their 401(k) contributions and twice as likely to stick to a monthly savings goal than people without such a plan.”
–Charles Swab Modern Wealth Index, 2017
Shortcomings of Traditional Advisors and the new Robo-Advisors
When it comes to retirement planning, a traditional investment advisor may not be the best solution for planning your retirement. While he or she may have helped you during your accumulation years (prior to retirement), the de-accumulation or income withdrawal phase (in retirement) presents an entirely new set of challenges and risks that must be addressed by a retirement specialist vs. a financial generalist.
While there are many good advisors out there, some of these thinly veiled, self-proclaimed “retirement” advisors are little more than data gatherers who meet with you a couple times: first, inputting your data into a planning software program and letting it do its thing, and then second, giving you the software’s lengthy printout of numbers and projections in a nice leather folder, without the retirement services you truly need. The cost of this glorified retirement plan can be pretty steep as well. The average advisor, according to Michael Kitces is charging 1.65% on a portfolio of $500,000! Your Retirement Advisor, by contrast, charges less than 1.00% and includes a full suite of retirement planning services.
The average advisor, according to Michael Kitces is charging 1.65% on a portfolio of $500,000! Your Retirement Advisor, by contrast, charges less than 1.00% and includes a full suite of retirement planning services.
There’s not a lot of difference between these advisors and the new flock of robo-advisors…which are online software companies doing similar data gathering and calculations in the cloud. While robo-advisors are undercutting the traditional advisor fees for their data output, they truly must be on cloud nine to think that the average baby boomer wants a computer program to plan his/her retirement.
What we’ve found after working with baby boomers over the last 30 years, and more recently with a focus on helping our clients plan their retirement, is that people want a person to help them. A qualified person whom they can trust. No one wants to be just a number on a spreadsheet. Most of us want a personalized experience and steady guidance to keep us from making a dire mistake with our finances.
But, the challenge remains, in an industry run amok with myths and misinformation, extreme biases and so many choices when it comes to advice…how do you stay away from the fox in the hen house and find a retirement professional who can truly help you? Read our tips for finding the right retirement advisor for you
“Your average investment advisor is not equipped with the knowledge, tools or technology to get this whole retirement planning thing done right. There’s a lot of moving parts that must be scientifically and mathematically put together by retirement specialists, not generalists.”
–Brian Saranovitz, Your Retirement Advisor co-founder
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