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Retirement Planning > Saving for Retirement

EBRI: Workers Prefer The Human Touch

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Many U.S. workers like the idea of getting retirement savings advice through a face-to-face meeting with a financial professional.[@@]

Researchers with the Employee Benefit Research Institute, Washington, have published data supporting that conclusion in a report on the 2005 Retirement Confidence Survey.

The researchers have based their reported data on telephone interviews with 1,001 U.S. workers age 25 and older and 252 retirees.

Although 87% of the survey participants told EBRI researchers they have used retirement planning advice from spouses, 57% have used advice from other friends and relatives, and 55% have used written materials received at work, 63% said they have used advice from financial professionals.

When interviewers asked the participants who already were saving for retirement which resources were the most helpful, financial professionals ran away with the race: 38% of the savers said they found advice from financial professionals the most helpful. About 17% of the savers identified friends and non-spouse relatives as the most helpful resource, and 11% of the savers said their spouses were the most helpful resource.

Fewer than 10% of the savers said information from the Internet, information from the television or radio, or information from seminars was the most useful.

Professionals Vs. Budgets Vs. Books

When interviewers asked all participants, including those were saving for retirement and those who had not started saving for retirement, about their resource preferences, professional financial advisors again came in first, with 37% of all survey participants identifying “professional financial advisors” or “a professional calculation” of retirement saving needs as the most useful retirement saving tools.

Having a budget came in second, with strong appeal for 15% of the survey participants, and reading a retirement planning book came in third, with strong appeal for 11% of the participants, according to EBRI.

People Vs. Computers Vs. Telephones

Workers without current access to employment-based retirement investment advice were far more interested in face-to-face meeting with advisors than with getting advice through the Web or through the telephone: 64% of those workers said they were at least somewhat likely to use in-person investment advice.

But the workers were interviewed mainly in talking to “live human beings” that they could see. Only 28% of the workers were somewhat or very likely to talk to advisors on the telephone, while 45% were open to the idea of getting retirement investment advice through the Web.

Persuasive Features

The EBRI researchers also looked at plan features that might persuade workers who do not yet participate in 401(k) plans and similar plans to do so.

The most popular feature was an employer matching contribution of up to 5% of the employee’s salary, with strong appeal for 31% of the workers sitting on the sidelines. A 3% matching contribution had strong appeal for only 16% of the workers on the sidelines. Having a financial professional held strong appeal for only 15% of the workers on the sidelines, but 21% of those workers said they liked the idea of investing in a lifecycle fund designed for workers within certain age groups.


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